Heineken says UK staff not set to lose jobs

Heineken employees in the UK will not lose their jobs despite the beer giant's plans to slash staff costs by a fifth in its head and regional offices.

The firm says Edinburgh is its largest UK site, encompassing offices at South Gyle. Picture: Ian Georgeson.

A spokesperson confirmed that it was not planning any job cuts in Britain as it does not have an office here that will be affected by the planned reductions. The company said it was being hit by fresh Covid-19 restrictions coming into force as more countries were exposed to a second wave.

The firm is present in Scotland with its Caledonian Brewery, and its base at Edinburgh’s Gyle, which is also home to its Star Pubs & Bars arm, whose venues include The Murrayfield on Roseburn Terrace in the Scottish capital.

It said that after promising not to make any structural lay-offs this year because of the pandemic, it will start reducing personnel costs by 20 per cent in its offices from the start of next year.

The brewing giant employs 85,000 people around the world. Around 1,700 of these work in Heineken's head office and regional offices, the spokesperson said. He declined to give a figure for how many jobs are likely to be cut in total.

"The situation remains highly volatile and uncertain. We expect rolling outbreaks of Covid-19 to continue to meaningfully impact many of our markets in addition to rising recessionary pressures," chief executive Dolf van den Brink said.

"As we navigate the crisis, we are deliberately shaping how to adapt and emerge stronger from the pandemic. I am proud of the relentless drive of our employees and the agility they continue to demonstrate, taking care of one another, our customers, suppliers and communities."

The company revealed it had seen some improvement recently, and that British drinkers consumed more than 10 per cent additional Heineken beer in the last three months than during the same period last year.

Sales of its eponymous drink had increased by 7.1 per cent in the third quarter around the world, and reached double-digit growth in the UK, Brazil, China, the USA, Nigeria, Singapore, and Poland. However, other beer brands that it owns performed less well, dropping in sales by 1.9 per cent across the quarter, Heineken said.

Net profit hit €396 million (£357m) in the first nine months of the year, down by more than three quarters on last year. The business started to recover from the depths of the crisis during the summer, but now, new waves and restrictions are expected to have consequences for the business. It said that in Europe, on trade has been more affected than off trade.

Improvement

Mr van den Brink said: "Our performance during the third quarter continued to be impacted by the Covid-19 crisis. As many lockdowns eased, our volumes improved sequentially compared to the last quarter."

Hargreaves Lansdown analyst William Ryder said: “Heineken’s shown the beginnings of a refreshing recovery after lockdowns hit sales during the first half. However, a second wave of coronavirus and accompanying restrictions threatens to set the group back yet again. But people like beer and will still like beer when this is all over, so we’re not worried on that score.“Our primary concern remains the balance sheet. We didn’t get an update today, but it’s hard to imagine the situation has materially improved.”

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