Heineken to sack 8,000 workers after investing N276m in Nigerian Breweries

Few months after Heineken invested over N200 million in Nigerian Breweries, the Dutch company plans to sack 8,000 workers across its markets.

Heineken decided to cut jobs following a decline in its earnings.

Heineken recorded a net loss of €204 million ($247 million) in 2020, affecting the financial strength of the Dutch brewer. Heineken’s beer sales plunged by 8.1% for 2020 Full Year, while the company’s core brand (Heineken) dipped by 0.4% – part of the company’s brand into Strongbow and Amstel; it sells over 300 brands globally.

The brewer said the COVID-19 pandemic and measures of government globally to curb the pandemic had impacted negatively on its product consumption, as no-trade – restaurant, cafe and bars – were lockdown.

As a result of the dip in sales and returns, nearly 10 per cent of Heineken’s workforce will lose their jobs. The company said the retrenchment will help reposition it in the global market.

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The company said layoffs in the global markets will be determined by the local circumstance. But it’s short to long term plan is to reduce its personnel cost, thereby, cutting the 85,000 workforce by 8,000 – a plan it had nurtured since October 2020.

According to the analysis of the financials, Nigerian market was positive on Heineken’s sales and earnings, although, Nigeria’s currency negatively impacted on the company’s net revenue.

“Currency translation negatively impacted net revenue (beia) by €1,259 million or 5.3%, mainly driven by the Brazilian Real, the Mexican Peso, the Nigerian Naira, the Russian Rouble and the South African Rand.” Heineken said in its financials.

It further highlighted that Nigeria was one of its revenue drivers for the company’s alcoholic and non-alcoholic brands during the period Heineken Europe earnings dip, “The brand grew double-digits in 25 markets including Brazil, China, the UK, Poland, Singapore, Nigeria, Germany, Chile, Ivory Coast, Laos, and South Korea.”

“Underlying price mix was up 1.0% (2H19: 3.2%) driven by Brazil, Mexico, Ethiopia and Nigeria more than offsetting the negative channel mix in Europe.” Heineken said about its core brand.

Adding that its Tiger brand also performed well in Nigerian market. Also, its Maltina brand was not left out of the upward movement in Nigeria, Ripples Nigeria gathered.

The growth of Heineken in Nigeria could have influenced the company to increase its exposure in the country, following an investment of N276 million in Nigerian Breweries, to purchase 233,110 additional share units, which increased its stake in Nigerian Breweries to 37.76%.

By Fakoyejo Olalekan….

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