Bad news for hop lovers, it will cost more to enjoy your favorite Little Fret by the end of 2022.
Posted at 6:00 am
Molson Coors has announced another 3-5% price increase for its products in the United States through the end of 2022. And all indications are that Canadian consumers are not being spared.
“I’m not used to giving hints about upcoming price increases in Canada. But it is clear that inflation is affecting our costs, and it is inevitable that this will be reflected in price at the consumer level,” Frederic Landtmeters, president of Molson Coors Canada, said in an interview with The press.
Inflation was 8.1% in June and the Bank of Canada expects it to remain around 8% in the third quarter of 2022.
This will be a second price increase. Earlier this year, Molson Coors raised its prices by 4% to 5% in the United States. The Canadian Division had followed suit.
The price of beer has gone up this year. In Canada, as in the United States, we have seen inflation surpass the 2% target by 2021. We have started enforcing price increases as we see throughout the economy. The increases were introduced to compensate for inflation in our costs.
Frederic Landmeters, President of Molson Coors Canada
Mr. Landtmeters pointed out that the price increases in the beer category have not yet matched the rate of inflation in Canada.
Second-quarter 2022 results released Tuesday showed revenue flat at $2.9 billion through April, May and June (down 0.6%). Pretax income fell 88% to $47.3 million.
Inflation, the aftermath of the abandonment of certain economy brands in the United States, and the 11-week strike at the Saint-Hubert brewery in Longueuil largely explain these dismal results.
Investors sanctioned the company, with the stock losing 6% of its value to $53.49 on Tuesday. It must be said that Molson Coors (TAP in New York) action is up 22% since the start of the year, a remarkable performance in a bear market, while the S&P 500 Index has risen since Janah January. On Friday, TAP ended the session at $54.07, up 2.19%.
Molson Coors is also sticking to its forecast for 2022: sales increase of around 5%, pre-tax profit increase of the same magnitude and free cash flow (Free cash flow) of approximately $1 billion for the full year.
“For Canada we have been on a really positive trajectory in terms of revenue growth and honestly, even if the Longueuil labor dispute has put our momentum on hold I am very confident that we will return there and we are coming back to it just six weeks after the end of the industrial action,” said the President of Molson Coors Canada.
Davies versus De Bruyne
The sparkling alcoholic water and other new malt-based beverage sector continues to deliver on its promise.
“Two weeks ago I saw that our Vizzy brand had become number one at Couche-Tard in Quebec,” said Mr. Landtmeters. We focused on the Vizzy and Coors Seltzer brands, two brands in the top 10. Today we added a third, Topo Chico, in English Canada. I plan to launch it in the Quebec market probably by the end of 2023. »
Molson is forecasting a better fourth quarter than 2021, which had suffered from the closure of bars and restaurants. The soccer World Cup also takes place during this time. “November isn’t usually a big month for beer sales,” notes the boss from the flat country of Stromae.
Mr. Landtmeters has already marked November 23rd in his calendar, the day of the meeting between the teams from his two home ports: Canada and Belgium.