Heineken says Level 5 restrictions having material impact on the company

Parent company plans to cut personnel costs by 20%

The Heineken brewery in Cork at Lady's Well. The Level 5 restrictions, which significantly impact the hospitality sector, will remain inplace until December 1.

Heineken Ireland said it remains committed to avoiding any structural layoffs in Ireland this year but has begun talks with staff representatives as it examines costs in the wake of Covid-19 restrictions.

The brewery giant's parent company Heineken NV said last week it would begin restructuring its head and regional offices in 2021 with the aim of cutting personnel costs by 20%.

The world's second-largest beer maker performed better than expected over the June-September quarter due to increasing beer sales in the Americas. However, they said the Covid-19 pandemic was still too uncertain to provide a reliable 2020 outlook.

Heineken NV said in order to be more agile and respond rapidly to the changing environment, it would streamline its head office and regional offices with an expected reduction of around 20% starting early next year.

Headquartered in Cork, Heineken Ireland employs approximately 400 people across the island of Ireland producing Murphys and Beamish stouts along with other Heineken products.

A spokesperson for the company told the Irish Examiner that the closure of the hospitality sector as part of Level 5 restrictions has had a material impact on the company.

"At the start of the pandemic, Heineken pledged no structural lay-offs related to Covid-19 during 2020 and Heineken Ireland remains committed to that."

"Unfortunately, given the significant challenges we face now and into the future, we will need to examine all of our costs to ensure that we are in a position to manage the challenges and opportunities ahead. To this end, we are engaging in a meaningful dialogue with staff representatives in relation to potential changes and the impact these potential changes could have on our organisation."

As restaurants and bars serving food reopened in June in Ireland following the first lockdown, Heineken collected and refunded 100,000 kegs of beer, stout and cider that was sitting in cellars and dispensing taps.

Level 5 restrictions will remain in place until December 1 with the hospitality sector hoping restrictions will be eased to allow them to recover some of the lost trade in the run-up to Christmas.