Heineken won’t shut down as widely reported, despite challenges faced

According to well placed sources, Heineken is in negotiations with municipal officials from Ethekwini and KwaDukuza, who foresee the beer-giant's choice of location providing a massive financial boost for the region. Image: iStock

Heineken further called on government to assist its industry in saving South Africans’ jobs.

Heineken South Africa has confirmed that it will not shut down its production entirely, following reports that it was going to halt its R6-billion expansion plans including exploring the establishment of a brewery in Kwazulu-Natal.

In a statement on Monday, Heineken SA said despite the tough challenges it is facing due to the Covid-19 lockdown-induced ban on liquor sales, it remained committed to long-term investment in the country.

The beer brand owns includes Heineken, Amstel, Windhoek, Sol, Miller Genuine Draft, Strongbow Cider, Soweto Gold and Tafel.

Heineken’s proposed R6-billion production facility was expected to provide a massive financial boost for the region, creating 400 permanent new jobs and making many more service-related employment opportunities available.

The alcohol ban has placed the industry under pressure to retain jobs and create new ones while contributing to South Africa’s economy.

READ MORE: Booze ban puts black-owned business development on ice

“Local production is hampered, resulting in ongoing efforts by the business to implement cost-cutting measures including, but not limited to, salary cuts as we desperately attempt to protect the jobs of more than 900 employees.

“Approximately 117,000 jobs were lost in the industry during the first ban on alcohol sales.

“Currently, countless businesses that rely on Heineken have had to close their doors or scale down their operations because of the sudden nature of the government’s decision to stop the sale of alcohol.

“This has caused job losses and untold suffering, stress and panic, with an estimated one million livelihoods at risks,” said Heineken.

Heineken further called on government to assist its industry in saving citizens’ jobs.

“We are willing to work with government on specific issues that negatively affect our society. The industry demonstrated its commitment in the initial resumption of trade, by delivering numerous solutions to ensure safe and responsible trading throughout our value chain.

“We urge the government to prioritise both lives and livelihoods at this time,” said the beer brand.

ALSO READ: Lift booze ban to save R40bn tavern industry, council asks ‘uncaring govt’

Meanwhile, the South African Breweries (SAB) announced that it would no longer be investing R2.5 billion in its annual capital and infrastructure upgrade programme this year.

The brewery company said it had lost 30% of its annual production due to the ban on alcohol sales.

According to SAB vice president of finance Andrew Murray, the brewery had intended to invest R5 billion over the next two years while the R2.5 million planned expenditure for the next financial year remained under review.

The investments that were being considered included upgrades to operating facilities and systems, as well as the installation of new equipment at selected plants.

Additional reporting from Vaalweekblad and Moneyweb.

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