Heineken SA shuts down production, halts R6bn expansion plans for North Coast

In the wake of the coronavirus pandemic and the collapse of the restaurant and bar trade, Heineken South Africa has been forced to shut down production entirely.

This has significantly impacted the company’s ambitious growth strategy, with the beer giant withdrawing its plans to expand its geographic footprint onto the North Coast.

ALSO READ: Heineken eyes North Coast for expansion

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 Inyaninga site near Dube TradePort had been earmarked for its new brewery.

The Heineken portfolio includes eight brands:

Heineken, Amstel, Windhoek, Sol, Miller Genuine Draft, Strongbow Cider, Soweto Gold and Tafel.

Heineken South Africa spokesperson Kate Kenny said: “South Africa remains a priority market for Heineken globally, and we continue to explore growth opportunities that will benefit the business and the local economy.

“However, due to tough micro and  macro-environment challenges, and with the additional strain brought on by the Covid-19 lockdown with restrictions on alcohol sales, we have had to reassess a number of our expansion ambitions including exploring the establishment of a brewery in KwaZulu-Natal. The ban is placing immense pressure on our industry to retain jobs, create new ones and contribute to the local economy.”

“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 Kenny.

With no end in sight Heineken joined many industry voices calling for the immediate recommencement of alcohol trade.

ALSO READ: It is official, Heineken to set up shop near Dube TradePort

The South African Liquor Brandowners Association (Salba), the Beer Association of South Africa, Vinpro, and the Liquor Traders Association of South Africa have warned that restricting legal alcohol sales will lead to the growth of illicit alcohol trade.

“The liquor industry has a wide and deep value chain employing almost one million people across the country. Government’s decision has serious economic consequences, placing hundreds of thousands of livelihoods at risk.”

Comment from Heineken South Africa spokesperson Kate Kenny was added to this article on 04/08/20.

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