Heineken Cutting Jobs Due To Lower Demand For Beer

Heineken’s own numbers don’t contradict basic LC economics here, if anything, they underline the point that this is a margin‑defence exercise in a weakening market, not proof that price hikes are painless or sustainable.

I'd argue that your point on Heineken's margin in Ireland is mixing up “we’re making more profit in Ireland” with “demand is grand, keep hiking away.” Those are not the same thing.

A company can make more money in a territory while selling less beer overall.
Charging more per pint to those who still go out.
Cutting jobs and capacity to squeeze extra margin out of a shrinking or stagnant volume base.
That is exactly what Heineken is doing.
Thousands of job cuts, plant rationalisation, “productivity” drives, all dressed up in corporate‑speak, but fundamentally an admission that volumes and growth aren’t what they’d like them to be.
You do not take a chainsaw to headcount and capacity if all that’s happening is a happy, elastic customer base paying higher prices with no pushback.
So yes, the people who still walk through the pub door and still order Heineken are “willing to pay” those prices, for now.
That doesn’t mean there’s no substitution happening.
It just means you’re only looking at the people who haven’t substituted yet.

The substitution the LC textbook talks about isn’t always dramatic or visible in any one night. It can be things such as
One less night out this month, then that becomes normal.
One round fewer each visit.
Quietly switching to drinking at home where the same money buys a full weekend instead of two pints and a packet of crisps.
Younger cohorts never forming the same pub habit at all because the value proposition is gone.
All of that is consistent with Heineken reporting “better” profit numbers from Ireland.
Fewer, more affluent or more price‑insensitive punters in pubs, higher unit prices, the company stripping out costs in the background.
Great for the quarterly slide deck.
Not so great for the long‑term health of the pub trade or for anyone on the margin who has effectively been priced out of the social space.

The other sleight of hand is treating a short‑term uptick in profit as some kind of referendum on whether the strategy is “justifiable.” LC economics distinguishes very clearly between short‑run and long‑run.
In the short run, demand for a “night out” is relatively sticky.
People absorb price hikes because they don’t want to give up the ritual, they cut back elsewhere first, or they treat it as a last luxury.
In the long run, habits change.
Once people adjust, move socialising home, shift to cheaper options, get used to not going out the demand curve itself shifts left.
The pub stops being the default and becomes an occasional treat, if that.

That “coffin hammered shut” line about the Irish pub as a social hub isn’t melodrama, it’s describing that long‑run shift.
Rising input costs, rent, mortgages, energy, everything creeping up and on top of that, repeated price hikes at the tap.
The outcome is pretty simple: the pub becomes a venue for the shrinking slice of people who can still shrug at €7–€8 pints, and everyone else either trades down or drops out.
From the firm’s perspective, this can still look “successful” for quite a while.
High prices per pint.
Decent reported profit in a high‑price market like Ireland.
Costs chopped aggressively so even flat or drifting volumes can be made to look respectable on an earnings call.

From the perspective of basic demand theory, though, it’s exactly what you’d expect when a firm with pricing power leans hard on it in a cost‑of‑living crisis.
Quantity demanded falls on the margin, substitution happens, and you start hollowing out the broad middle of your customer base.
So no, you don’t have your economics wrong by pointing out that endless price rises collide with substitution.
The mistake is assuming “profits up in Ireland” means demand hasn’t budged and everyone’s happy to pay.

What it really shows is that Heineken is very good at extracting more from the people still left in the pub, while the people who’ve been priced out simply vanish from the numbers and from the barstools.

Thank you, I didn't want it to come off as being too bookish or as a veritable essay.
I agree with you in that the Breweries are trying to pivot to 0.0 and other soft alternatives in the face of a growing legislative burden.
That they are doing so by a combination of squeezing a reducing customer base without taking into account the lessons apparent in the last serious effort to enforce prohibition with the US's 18th amendment (and its revocation).

I don't think that there will be much growth in a market for Malted soft drinks here in Ireland ;) or in those parts of the EU that don't host US bases.
The push for 0.0 is part of that recognition IMO, but?
When people already balk at the price of popular soft drinks in Pubs, Venues & Restuarants?
The notion that we will be happy enough to pay more for 0.0 than said soft drinks, or indeed the equivalent with alcohol price is absolutely bat shít.

Its certainly a market segment that the breweries hope exists.
That said?
When your potential customer base, is, at least by Heineken's research more concerned with carb count than alcohol %?
That hope falls apart when a pint of non alcoholic beer averages 25grams + of carbs.
Also, noone under 60 feels emasculated by drinking a coke.
The cohort of drinkers who need to appear to be drinking a beer?
Well the same research that indicates weight loss and healthy living are the reasons behind declining beer sales, would also make that a much reduced cohort.

What 0.0 bollix?

I was out last night to see a friend's gig and didn't fancy getting the bus in that weather so drove and enjoyed 4 pints of Heineken 0.0 then hopped back in the car and drove home, ideal for it.

No I paid €24 for 2.3 litres of a non alcoholic beer that tastes fine with a seat in a nice warm pub (on a horrendous night) with 3 hours of live music and didn't have to worry about the cost of a taxi home.

That's good value in my book.

It was €4 for a 200ml bottle of coke, I'm happy with the choice that I made.

I actually find Heineken 0.0 indistinguishable taste-wise from normal Heineken.

Not sure if that's a good thing or a bad thing.

That's the whole point of them, if it tasted wildly different then you wouldn't get people like me choosing a 0.0 product when not wanting to have alcohol but still wanting to go out.

There is a subtle difference but not that much that it's a bad alternative, certainly better than a 200ml bottle of coke/7up.

Its a shite beer but times are changing. I talk to people in their 20s now, they don't really drink, more into smoking weed and hard drugs.