On Beer and the (Dutch) Economy

Yesterday, I posted a piece on why I feared that the Netherlands’ economy is also beginning to be seriously affected by the global financial/economic crisis.

Lo and behold, this morning my worst fears seemed to be totally confirmed.

A news article in the Dutch NRC Handelsblad carries the dreadful headline: “Heineken reports 87 pct fall in full year profit.”

You have to understand that Heineken is my favorite beer, and if anything happens to it, it will be the end of the world, as I know it.

It is also my understanding (again, I am not an economist) that booze and gambling are the last things to be affected in an economic crisis—or perhaps even two of the very few sectors in the economy that thrive under such circumstances.

This economic “knowledge” only heightened my questions and fears about the Dutch economy.

But, fortunately, scanning down the article a little more, I read:

Heineken reported an 87 percent fall in net profit for the full year 2008, due mainly to write downs in the value of businesses and a weak market in Britain, where the recession and a smoking ban hurt sales.

Whew! Felt a little better already.

And a little farther down, I read that although net profit was down, “sales rose 27 percent to 14.3 billion euros, boosted by the company’s 10.2 billion acquisition of Scottish & Newcastle in May, which made it the largest brewer in Britain,” and that “‘organic growth’ – a nonstandard measure that strips out the effects of acquisitions – in sales and operating profits would have been 7.4 percent and flat, respectively,” which was “better than expected.”

Feeling much, much better now.

But, I still worry about the Dutch economy.

Photo: Courtesy Heineken International