Heineken has announced that it will cut 70 jobs and put investments on hold in South Africa, following the impact of alcohol bans amid the Covid-19 pandemic, according to Reuters.
The brewer’s South African arm says there has been a significant impact from bans on alcohol sales and Covid-19 trading restrictions. At the end of December, the country banned alcohol sales for the third time to help reduce the pressure on emergency services.
According to Reuters, about 30% of local breweries have been forced to shut their doors permanently and some have abandoned planned investments. Several publications have reported that Heineken marks the first major company to make significant cuts as a result of alcohol bans.
With just under 1,000 full-time employees at Heineken South Africa, 70 will lose their jobs as the brewer looks to restructure its operations to build a future for the business.
The news comes after Heineken announced in October that it will cut jobs at its head and regional offices in 2021, despite beer volume sales improving in the third quarter, relative to Q2. The South African market had been mentioned within previous financial results with references to poor beer volumes amid lockdown restrictions.
“Prior to considering this action, the company implemented various cost mitigation measures throughout 2020,” said Heineken South Africa human resources director, Yvonne Mosadi, as cited by Reuters.
“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.”
Last year, Heineken South African cancelled plans to build a ZAR 6 billion ($403 million) brewery in KwaZulu-Natal after a second ban on alcohol sales was announced.
Reuters reported that Heineken said other new investments will also be placed on hold. The owner of the Amstel and Sol brands will continue to review its cost and organisational structure to meet future needs of the business.