Heineken presses ahead with cost savings

Heineken presses ahead with cost savings

Heineken is to close its Louny Brewery in Czech Republic due to falling demand for beer in the country and the group's global strategy to cut costs.

Up to 59 staff from Heineken's 987-strong workforce in Czech Republic are set to lose their jobs following the move, the Netherlands-based brewer announced today (25 January).

Beer production at Louny will be transferred to Velké Brezno and Krásné Brezno (Usti Nad Labem), while the brewery site will be turned into a distribution centre.

Heineken said that the decision is part of its three-year cost savings programme, entitled Total Cost Management.

Falling domestic beer sales and lower export demand for Czech beers mean that the high costs of the running the "outdated" Louny brewery can no longer be justified, Heineken said.

"It is expected that the recent sharp increase of excise duty on beer will further accelerate this trend," said the brewer, which last week made a significant stride into Latin America by agreeing a deal to acquire Mexico's FEMSA Cerveza.

“The proposal to transfer the production from the Louny brewery is not a decision that we have taken lightly," said Lieven Van der Borght, general manager of Heineken's Czech Republic business. "We have also concluded comprehensive severance terms with the trade unions,” he said.

A total of 13 jobs at other production sites within Czech Republic will be made available to Louny's 68 brewery employees.

Heineken's Total Cost Management scheme has also seen it announce job cuts in the UK, Russia and Romania.