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Heineken Increases Profits Thanks To Big Jump In Sales In Latin America

A "big jump in sales in Latin America" helped Heineken increase profits, according to Duncan Robinson of the FINANCIAL TIMES. Rising sales of Heineken's premium brands such as Desperados in Latin America and Asia helped the brewer "avoid the hangover suffered by its much larger rival AB InBev," which was hit by a "big drop in comparative volumes after a bumper World Cup last year." Overall, operating profits at the group rose 3.4% to €1.6B ($1.74B) for the first half of '15, due in particular to strong growth in the Americas and Asia. The results sent shares up 5.2% to €75.46 ($82.19). Volumes in the premium sector rose 4.7% as Heineken maintained its marketing push. The group sponsors a range of events from the UEFA Champions League and the upcoming Rugby World Cup -- a tactic that has "become increasingly costly." Heineken CEO Jean-François van Boxmeer said, "The more a sport attracts people, the more expensive it becomes." Despite the increasing costs of such deals, he made clear that Heineken would keep doing them. He said, "If you are going to sponsor something and get out after five years because it is too expensive, you have lost five years. It only works over the very long term" (FT, 8/3). In London, Sara Spary wrote in its latest financial results, Heineken sales grew 2% globally, "with revenues down slightly in Europe but volumes of Heineken brand beer sold in the Western Europe region up 2.6%." The brand has, the business said, benefited from the "successful campaign to support the UEFA Champions League football sponsorship" which was activated in 109 markets and supported via digital innovation, special-edition bottles and a global TV campaign. Heineken said that "the second half of the year would benefit from a significant pipeline of marketing and sponsorship activity, including partnering with the next James Bond movie and the brand's sponsorship of the Rugby World Cup" (MARKETING MAGAZINE, 8/4).

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