By NATARIO McKENZIE
Tribune Business Reporter
A CABINET minister yesterday voiced optimism that Commonwealth Brewery’s creation of 30 new posts would minimise recently-unveiled job losses to a “net” 43.
Dion Foulkes, minister of labour, said some positions may have already been taken by workers among the 73 who were disengaged by the BISX-listed brewer’s retail unit, 700 Island Wines and Spirits, on Monday.
“Commonwealth Brewery has created a minimum of 30 new positions within the company,” he added. “The Employment Act says that those positions must be offered to the persons made redundant. I understand that some of the 73 have already taken some of the new positions. At the end of the day we may see a net impact of 43 persons being unemployed.”
Mr Foulkes, though, acknowledged: “Still, 43 is too much, one is too much and the Department of Labour and the government are going to do all that we can to assist those persons. I also want to say we were notified by Commonwealth Brewery on February 1.
“The law says that when more than 20 persons are being made redundant there must be a two weeks’ notice period to the minister of labour, and anything under 20 there must be one week’s notice. I was very pleased with the measures that Commonwealth Brewery took, including the counselling for those affected and doubling the entitlement for severance pay to those persons.”
Commonwealth Brewery said on Monday that a tough economy and competitive pressures from cheaper rival beers had forced it to terminate the 73 staff, adding that its retail arm had developed too many middle management layers.
The vertically integrated brewer, wholesaler and retailer said it had made redundant 53 positions on New Providence, and 20 on Grand Bahama, as it adjusts its business to prevailing market conditions that include reduced consumer spending and fierce competition from its Bahamian Brewery & Beverage Company rival.
Ron Hepburn, Commonwealth Brewery’s director of retail, had also expressed hope that the downsizing would not result in all 73 affected employees departing the business despite having been forced to “streamline” the 200-plus workforce.
He said those impacted would be able to apply for newly-created positions within the company, and told Tribune Business that the move will not impact the operations at any 700 Wines & Spirits outlet. All 56 retail sites will remain open, and Mr Hepburn said some stores were “set to open in the next month or so”.
He told Tribune Business: “If you look at our financial position, as reported in the third quarter last year, we have been impacted by competition - mostly from imported beer brands like Bud Lite and the like. At the end of the day this is just the result of different drivers that impacted our overall business that caused us to make a decision to streamline our operations.”
Mr Hepburn’s statement indicates that the impact of Bahamian Brewery’s Budweiser distribution contract coup is now being felt market-wide. Tribune Business reported back in 2015 that the Grand Bahama-based rival had seized the Bahamian distribution contract for Budweiser, and all brands produced by Anheuser-Busch, from Commonwealth Brewery. The move had effectively ended a four-decade reign by Commonwealth Brewery as the Bahamian distributor for the brands produced by the world’s largest brewery.
Commonwealth Brewery, which is 25 percent owned by Bahamian shareholders, last year also made a decision to absorb a “significant” cost by choosing to “eat” the 4.5 percentage point value-added tax (VAT) hike across its entire Kalik beer product line.
This was done to maintain Kalik’s price competitiveness, and as a goodwill gesture to consumers struggling to adjust to the impact of a 12 percent VAT rate introduced with the 2018-2019 budget.