Brewers start to feel the costs of prolonged war in Iran
BUD•AB InBev, Heineken and Carlsberg warned that higher costs tied to the Iran conflict are pressuring profits or will do so as hedges expire. AB InBev’s third-quarter EBITDA margin fell 34 basis points to 36.1%, while Carlsberg expects a more significant rise in war-related costs in 2027.
1. Costs weigh on brewers
AB InBev, Heineken and Carlsberg said rising costs linked to the conflict in the Middle East were beginning to pressure profits or would do so in coming months as hedging contracts expire. Higher electricity, fuel and aluminium costs affect brewers’ production and transportation expenses.
2. Different hedging approaches
AB InBev said higher commodity, distribution and transportation costs offset stronger-than-expected revenue growth in some countries. Its third-quarter EBITDA margin contracted 34 basis points to 36.1%, and cost of sales reached $7.21 billion, its highest since 2023. Finance chief Fernando Tennenbaum said diesel costs that cannot be hedged affected the quarter; the company otherwise agrees 12-month hedges monthly.
3. Pressure expected in 2027
Heineken said costs were significantly elevated, particularly in Asia, some African markets and increasingly Europe, and that the trend would continue next year. Between 80% and 90% of its costs for 2027 were hedged. Carlsberg expects a more significant rise in war-related costs in 2027, driven by energy and aluminium, and plans to seek savings and raise prices on its brands.
