Heinz Irish profit slumps as firm grapples with inflation

Kraft Heinz’s Irish unit is in discussions with retailers on how to manage surging inflation, as the business here saw profits fall by a fifth in 2021.

Accounts just filed by HJ Heinz Company (Ireland) Ltd, which operates all the company’s brands across the island, show profits after tax slumped 20 per cent to €4.1 million in the year to December 25th. The drop in earnings was driven in part by interest charges, which increased €900,000 year on year.

The company experienced “higher than expected commodity prices largely due to inflationary pressures” in 2021, the directors state in the accounts.

“We expect this cost inflation to remain elevated through at least 2022,” they wrote. “Although we take measures to mitigate the impact of this inflation through pricing actions and efficiency gains, if these measures are not effective our financial condition, operating results and cash flows could be materially adversely affected,” the directors added.

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Heinz said it was “working collaboratively” with retailers to help ease the pressure from rising prices. Heinz stopped supplying popular products to Tesco in the UK for a time earlier this year in a row over price increases.

Still, the business boosted revenue 5 per cent to €44 million and increased its market share of the tomato ketchup market to more than 58 per cent.

The firm paid a dividend of €5 million to its parent company within the Kraft Heinz group.

The directors state that the company increased its market share of mayonnaise in the Republic by 1.8 per cent to 8.3 per cent while its market share of baked beans rose by 1.2 per cent to 34.9 per cent. While its share of the canned pasta sector slipped marginally, it remains the dominant player with 87.9 per cent of the market.