Tuesday, February 12, 2019

Heineken in Africa

In 2013, Heineken CEO Jean-François van Boxmeer described Africa as “the international business world’s best kept secret”. Heineken faces so little competition that in some African countries one small bottle of beer is no cheaper – or sometimes even more expensive – than in Europe, while production costs are lower. According to Heineken’s most recent available figures (2014), beer in Africa is almost 50% more profitable than anywhere else. Some markets, such as Nigeria, are among the most lucrative in the world. Freddy Heineken, the company’s  CEO, who died in 2002, used to say: “People don’t drink beer. They drink marketing.” He understood that selling beer successfully is a matter of psychology. It’s about image and an emotion. For many years, Heineken’s image has remained largely untroubled by the reality of its operations in Africa.

In the early 1960s Heineken was an ardent supporter of a “white bloc” of southern African countries, including Rhodesia, South Africa and the two Portuguese colonies Angola and Mozambique. I learned that in South Africa a senior manager urged his colleagues not to act “in opposition to the letter/spirit of apartheid”

 Heineken channeled enormous amounts of money from Africa into a subsidiary in Switzerland, taking away an important source of fiscal revenue from the governments of newly formed independent states.

"Lawlessness in many countries enables Heineken to sell and advertise its drinks without the hassle of regulation. Levels of education are often low, which can be a hindrance when looking for qualified personnel – but also a blessing in disguise when there is information to be spread about the supposed “positive” properties of beer."

"Free crates of beer given to elites in Burundi, I saw little schools in Nigeria with beer logos painted on the walls, and I witnessed the misery of the drinking dens in the South African township of Soweto. In the Democratic Republic of the Congo (DRC), I saw the worryingly cosy relationship between the brewery’s PR department and local journalists. These issues turned out not to be incidental, but formed part of a pattern"

Most of Heineken’s staff members in Africa are on relatively low salaries by local standards. For most of Heineken’s staff in Africa, there is no pension scheme, but at the end of their careers they are often entitled to a good severance package. Some use the money to start their own company.

One group of employees gets fussed over more than most: expats. Very often, the company maintains rent-free luxury villas on or near local Heineken premises, for expatriate staff. The number of African managers has risen across the continent as a whole, but in most countries white staff remain at the top of the pecking order. (At the time of writing, nine out of 13 African subsidiaries are headed by Europeans, and four by Africans.) According to Heineken’s 2014 annual report, entry-level employees at Nigerian Breweries got a little over $2,000 per year (£1,500), while the company spent the same amount every day on a Dutch director in Nigeria – not counting the bonuses.

“As a simple operator, you don’t earn much,” says a former Rwandan manager whose first job was as a maintenance engineer. “But supervisors and higher staff are well paid, and when I started out there were many more managerial roles available, compared to other companies. If you do your work well, you get recognised and promoted.” For successful employees, there are also status-enhancing perks such as company cars or tablet devices. 

In its operations across Africa, Heineken uses subcontractors and zero-hour workers increasingly often. In many countries, the income of a day labourer or a temporary worker does not amount to the “decent standard of living” that the company says is its goal. A cleaner in DRC cannot survive on a monthly salary of $40-50, and even a security guard who makes three times as much will find it hard to make ends meet. Moreover, external workers have no rights to healthcare or other services. In theory, it is the agencies that hire them that must provide these, but failure to do so does not tend to stop Heineken from working with them.

In Lubumbashi, a city in DRC, a temporary worker said, "They don’t have the whip like they used to in colonial times, but the pressure of work is too much and bears no relation to our salaries.”

Wesseling, who worked at Heineken from 1991 until 2005, says: “We had promotion girls in Africa. We knew this, in spite of internal denials. It was extra problematic because we had been running a very successful Aids policy in Africa.” From 2001, HIV-positive Heineken workers in Africa and their immediate families had been offered free therapy for life, which would continue after retirement or redundancy. Therapy always came with counselling, free condoms and HIV tests – and Heineken’s treatment of its workers won praise and admiration across the world, including among US politicians. “It gave our people in the US a great story,” said Wesseling. “So nobody was going to kill that image with African promotion girls having to sell our beer under the direst of circumstances. Better to frame that as a local custom: ‘That’s how they do things over there.’” 

In 2007, an internal inquiry showed that Heineken was using about 15,000 promotion women globally, mostly in non-western countries. No fewer than 70 markets were considered risky for the promotion women because the work involved or could lead to sexual abuse, low pay or being forced to wear provocative uniforms. Sixteen of those markets were in Africa: circumstances were least favourable there, and Heineken was said to use almost 2,000 promotion women. According to internal documentation, only one African market was problem-free.  In DRC, the country where the most abuse was reported, revealed that unwanted advances came not only from customers but also from Heineken staff. “The enormous uncertainty of keeping a job combined with the absence of employee rights of legal status makes PW [promotion women] vulnerable for misuse from several stakeholders,” the internal report notes. Often, the women, who earned very little, had to sleep with managers if they wanted to keep their job. But if they needed to see a gynaecologist or get an abortion, which was often illegal and dangerous, they had to sort everything themselves, and pay for it. They also had to drink five to 10 large bottles of beer every working day, in order to persuade customers to consume more. 

Says a former director in DRC. “It was a mess. When this thing was going on in Cambodia, we also got rules, but they did not change a great deal. For a while, management hired taxis to get the girls home at night, but eventually they decided this was too expensive. Those girls were getting less than the minimum wage, and they were used by Bralima (subsidiary) personnel. Very often these were girls with problems, very vulnerable. Given that we paid them so very little, they were virtually forced to go home with a man.”

The women’s incomes differ from one agency to another, and on average, at the time of this research, they earn about $8 per day. In an expensive city like Lagos, this is not much, but it tallies with other forms of unskilled work.

Promotion women in DRC and Nigeria continue to work under the most dreadful conditions. “Every evening I am touched against my will. It doesn’t matter whether I work in an expensive cafe or a popular bar,” says Peace, a promotion girl in Lagos.

Wesseling, the former HR manager, says: “We knew that during the 1990s, things were happening in Congo that were beyond the pale. We had a very powerful HR manager who maintained a selection procedure that would not be accepted here. Women had to provide sexual services to get a job.” Heineken’s current CEO, Van Boxmeer, was general manager of Bralima from 1993 to 1996. But according to Wesseling, “he did not act when he was general manager there”.

Heineken revised an earlier declaration in which it had claimed that the company employed just 200 promotion women in two countries in Africa. An internal inquiry now revealed an estimated 4,000 women in 13 countries. The company announced a series of measures: clear and unambiguous rules, training, dress codes, no alcohol on the job and transport home after work. These are, almost word-for-word, the same measures that were put in a policy paper in 2004, which remained an empty promise. But this time, Heineken said, things really would be different. So, in March 2018, the company made a firm promise that reassured some politicians and stakeholders. “If we can’t guarantee good working conditions for our promoters in certain markets by the end of June, we’ll stop employing them there.”
They still had to accept sexual harassment as part of the job, their uniforms were so short it made them feel like prostitutes, and some of them were forced to sleep with their bosses.

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