The South African arm of Heineken will cut 70 jobs and put new investments on hold in the country due to the significant impact of bans on alcohol sales and COVID-19 trading restrictions, it said on Wednesday.
South Africa has recently banned alcohol sales for the third time as part of efforts 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.
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."
Cost And Organisational Structure
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 6 billion rand ($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 will be placed on hold.
On Friday, South African Breweries, part of Anheuser-Busch InBev, cancelled 2.5 billion rand of investments earmarked for 2021.
News by Reuters edited by Donna Ahern, Checkout. Click subscribe to sign up for the Checkout print edition.