Heineken to cut jobs after profits fall Business

Heineken will cut its workforce by a fifth after falling profits following the widespread closure of pubs and bars during the pandemic.

The brewing giant, which employs 85,000 people worldwide, said job losses would occur at its headquarters and regional offices next year, where around 1,700 people are employed. The cuts will not affect the brewer’s UK workforce, Heineken said.

It comes as the group seeks to cut costs in its offices amid uncertainty caused by the coronavirus crisis.

Heineken, which also owns Birra Moretti, Amstel and Tiger beer, suffered a 76% drop in profits to € 396m (£ 358m) in the nine months of September compared to the same period Last year.

The group said it could not provide a reliable outlook for the rest of the year, warning of a volatile last quarter amid new restrictions imposed by many countries in Europe.

In Asia, new restrictions are in place in Malaysia, Myanmar and Sri Lanka.

Dolf van den Brink, Managing Director, said: “The situation remains very volatile and uncertain. We expect the Covid-19 outbreaks to continue to have a significant impact on many of our markets in addition to recessive pressures. increasing. “

Heineken beer volumes fell 1.9% on a comparable basis in the third quarter, beating analysts’ expectations.

The decline was most pronounced in the Asia-Pacific region, where sales fell 12.3% due to price increases and Covid-19 restrictions in Vietnam.

Sales in Africa, the Middle East and Eastern Europe fell 2.5% due to a five-week alcohol ban in South Africa and sharp price increases in Ethiopia due to fee increases.

In the Americas, beer volumes grew 2.5%, but Europe fell 2.4% following declines in the UK, Spain and the Netherlands.

Heineken said there had been some recent green shoots in beer consumption, with UK drinkers consuming a tenth more in the past three months than at the same time a year earlier.

Global sales of Heineken’s flagship brand grew 7.1% in the third quarter, with double-digit growth in UK, Brazil, China, US, Nigeria, Singapore and Poland .

But Heineken said restrictions on pubs and restaurants and the subsequent shift by consumers to buying beer in stores would impact revenues, while costs would likely increase with cheaper kegs to produce, to reuse and transport only cans and bottles.

The brewer has already cut its discretionary spending and some capital spending.

Shares fell 4.6% in Amsterdam.