Heineken SA to cut jobs, put investments on hold

THE South African arm of Heineken will cut 70 jobs and put new investments on hold, the company said yesterday.

Heineken South Africa has been limping ever since the country introduced a ban on alcohol sales and Covid-19 trading restrictions.

Namibia’s biggest alcohol producer, Namibia Breweries, also has investments in the company.

South Africa recently banned alcohol sales for the third time in an effort to free up space for Covid-19 patients in hospitals burdened with alcohol-related injuries.

About 30% of local breweries have been forced to shut their doors permanently, and some, including Heineken, have abandoned planned investments.

It is reported that Heineken employs just under 1 000 full-time employees in South Africa where more than 165 000 people in the industry have lost their jobs since lockdowns started at the end of March last year.

The company said in a statement in light of the continued market pressure and in line with a global review by its Dutch parent company, it now finds it necessary to restructure its operations to build a business fit for the future.

“Prior to considering this action, the company implemented various cost-mitigation measures throughout 2020,” Yvonne Mosadi, the human resources director of Heineken South Africa, said.

“Unfortunately, given the ongoing challenging situation the company finds itself in, these measures are no longer adequate to manage and sustain the operating costs of the business.”

The maker of Windhoek and Amstel beer said it would continue to review its cost and organisational structure to ensure “it is fit for the future needs of the business, particularly during this tumultuous period”.

In August, the brewer dropped plans to build a N$6 billion (US$403 million) brewery in KwaZulu-Natal, following the second ban on alcohol sales.

In an emailed response to questions, the brewer said other new investments would be placed on hold.

Last Friday, South African Breweries, part of Anheuser-Busch InBev, cancelled N$2,5 billion of investments earmarked for 2021.

* Reuters, own reporting