SEVILLE, Spain, Oct 23 (Reuters) - Heineken
for now has to take the hit of a 15% U.S. import tariff on its
European-made beers, CEO Dolf van den Brink told Reuters on
Thursday, hurting its profitability in one of the Dutch brewer's
key growth markets.
The world's No.2 brewer exports to the U.S. from Europe and
Mexico and any shift in production was "not imminent", Van den
Brink told Reuters on Thursday, having previously said the
company was weighing all options.
The CEO's comments followed an investor event in
Seville, Spain, where he also said it remained cheaper to export
beer from Europe than invest in U.S. production to avoid a 15%
tariff rate agreed between Brussels and Washington in July.
It also did not yet make financial sense to ramp up U.S.
production in Mexico as road transport costs meant paying the
tariff was still cheaper. The breakeven point where it would
make sense to pursue either option was some time away, though
the company consistently reviewed its options, he continued.
For now, Heineken's profitability was suffering as it could
not raise prices out of step with its competitors, who are
largely local and do not face the 15% additional charge, he
said.
Van den Brink also told Reuters there were "more than 10"
markets it was considering exiting, but that some or all of
these may be able to rectify underperformance before it comes to
that.
The company was unlikely to sell any brands in its portfolio
spanning hundreds, even as it focuses the majority of its
investment on just a handful, he added, though it may stop
investing in some older labels which would see them "start
fading away over time".
Heineken could also pursue more brewery closures in Europe
as it looks to cut costs, but it was not planning to radically
change its manufacturing footprint there, he said.