Historic Caledonian Brewery owner Heineken slashes 8,000 jobs including some in UK

Global beer giant Heineken has announced plans to cut some 8,000 jobs including up to 100 in the UK where its corporate headquarters are based in Edinburgh and it also owns the historic Caledonian Brewery.

Heineken is present in Scotland with its Caledonian Brewery, and its corporate base at Edinburgh’s Gyle, which is also home to its Star Pubs & Bars arm. Picture: Ian Georgeson

The Dutch group’s restructuring plans were first announced in October, although it did not say at the time how many jobs would be affected. The 8,000 jobs represent nearly 10 per cent of its global workforce.

The cuts will affect less than 100 of the 2,300 or so employees in the UK, but jobs will go across the business.

Group chief executive Dolf van den Brink said: “In a year of unprecedented disruption and transition, our teams rose to the occasion and quickly adapted while not losing sight of the need to continue investing for the future.

“The impact of the pandemic on our business was amplified by our on-trade and geographic exposure. We took diligent cost mitigation actions balanced with continued investment behind our growth platforms.

“We gained share in most of our key operations, a testimony to our ability to adapt and stay close to our customers and consumers in these turbulent times.”

The company, which also owns the Birra Moretti, Tiger and Sol brands, is the world’s second-largest brewer, with Heineken being Europe’s top selling lager. In the UK it also runs a pubs and bars business.

A spokeswoman for the UK business said: “The closure of pubs in March and subsequent restrictions, including over the Christmas period, have had an impact on sales volumes of beer and cider for the full year.

“While we experienced an increase in volumes in the off-trade, where our premium beer brands performed well, it in no way made up for the loss of volumes in the on-trade.

“The NHS vaccination programme is a light at the end of the tunnel, and we look forward to welcoming back consumers to pubs across the country as soon as it is safe to do so.”

The firm reported that UK retail volumes were strong, with its eponymous Heineken brand reporting double-digit growth in the UK.

Birra Moretti and Sol also saw strong growth in the UK, although cider sales decreased as it was heavily affected by UK pub closures.

Across the group, Heineken reported net revenue decline of 11.9 per cent for 2020, though volumes of Heineken were “resilient”, with a fall of just 0.4 per cent.

Susannah Streeter, senior investment and markets analyst at financial services firm Hargreaves Lansdown, said: “With little prospect of drinkers quenching their thirst with a beer at a bar in many of its crucial markets any time soon, the Covid hangover is set to linger a lot longer for Heineken.

“Heineken’s resilience has been hampered by its burdensome debt pile which has limited investment and firepower to deal with ongoing pandemic woes. That’s why cost cutting is now front and centre of its plan going forward. It will be a bitter plan to digest for 8,000 of its employees who will lose their jobs. Also on the menu of strategic change is a big shake up of its portfolio.”

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