Heineken’s South African subsidiary will cut 70 jobs and put new investments on hold due to the country’s third ban on alcohol sales and COVID-19 trading restrictions, the firm announced on Wednesday.
Africa’s most developed nation imposed a third ban on alcohol sales in early January, a move the government said was necessary 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 down permanently, and some like Heineken have abandoned planned investments.
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.
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,” Heineken South Africa Human Resources Director Yvonne Mosadi 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 will 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 $403 million brewery in KwaZulu-Natal following the second ban on alcohol sales.
On Friday, South African Breweries, part of Anheuser-Busch InBev, cancelled $165 million of investments earmarked for 2021.