Brewing giant Heineken has cuts its earnings guidance after consumer demand was hit by price increases.

The Dutch brewer, which also makes Fosters and Amstel, said it made “significant price increases” at the start of the year in an effort to offset “unprecedented levels of commodity and energy inflation”.

In the UK, the Office for National Statistics (ONS) said beer prices were 10.2% higher in June than a year earlier.

On Monday, the brewer said the volume of beer it sold over the first half of 2023 was down 5.6% year-on-year.

It told shareholders it saw a sharper 7.6% drop over the second quarter as a result of the “cumulative effect of pricing actions” and tough economic conditions on its customers.

The group reported “disappointing” trading in Vietnam, weakness in Nigeria amid volatile economic environment and softness in North America. It said trading in Europe was in line with expectations.

As a result, the firm reduced its predicted earnings for the year, indicating that it expects growth in operating profit before one-off costs to be between zero and a mid single-digit percentage.

It had previously pointed towards growth between a mid and high-single digit percentage.

Meanwhile, the firm reported that total revenues grew by 6.3% to 17.4 billion euros (£14.9 billion) over the half-year due to the benefit from higher pricing.

It said it also benefited from customers continuing to buy more premium brands.

Its own Heineken brand help support growth, as it also hailed stronger performances from Desperados, Birra Moretti and Beavertown beers.

Aarin Chiekrie, equity analyst at Hargreaves Lansdown, said: “Heineken’s had a wobble in the first half with a big miss versus market expectations, causing the shares to stumble in early trading.

“Despite this, price hikes were enough to offset lower volumes, helping the top line move to keep moving in the right direction for now.

“But bumper revenues didn’t make their way down to the bottom line as inflationary pressures and increased marketing spending took their toll.”