By YOURI KEMP
Tribune Business Reporter
Commonwealth Brewery yesterday pledged to retain at least 90 percent of its workforce as the final number of staff to be terminated in the latest redundancy exercise has not been determined.
A source at the Kalik manufacturer, speaking on condition of anonymity, told Tribune Business the BISX-listed brewer was still in the Employment Act-mandated consultation with employees likely to be impacted by the downsizing. They said some may yet be retained depending on the outcome, and it was inaccurate to say the figure of 34 terminations has been settled.
“We have not exhausted that process yet, and we have not determined how many persons will be made redundant, but we will retain about 90 percent of our staff,” the source said.
"All of our business areas are impacted by these redundancies. It will be in the production area in terms of the Brewery and logistics, as well as the marketing area, which includes the arm that involves advertising and our hosted events, along with areas on the commerce side and our supply chain.”
Confirming that a redundancy exercise has been initiated, the BISX-listed brewer said: “Commonwealth Brewery advises the public and its shareholders that the company is completing a restructuring exercise as a result of the COVID-19 pandemic.
"Like many companies, Commonwealth Brewery faces significant financial challenges as result of a combination of low tourism numbers, high unemployment and COVID-19 mitigating measures that have all caused a drastic decline in its sales volume. Nonetheless, the company honoured its commitment to no COVID-related layoffs in 2020.
"However, it is simply unsustainable to maintain a full staff complement through 2021. The impact to the company’s financial position means that Commonwealth Brewery has to restructure to stabilise its operations, while also positioning itself to rebound in the New Year. A part of that restructuring involves the possible redundancy of less than 10 percent of employees.”
The prospect of job losses at a company such as Commonwealth Brewery, which is 75 percent majority-owned by the deep-pocketed Belgian brewer, Heineken, further exposes the devastating impact of COVID-19 on businesses that would normally be considered among The Bahamas' strongest.
Lockdowns, border closures, curfews and other restrictions have heavily impacted sales to both domestic and international consumers, with Commonwealth Brewery suffering a $3.4m net loss for the first nine months of 2020.
"Net revenue during the third quarter declined by 27.8 percent, while operating expenses reduced by 19.8 percent compared to the third quarter 2019. As a result, we experienced a total comprehensive loss of $766,000, compared to a positive result of $1.68m during the corresponding period of 2019," the Kalik brewer said of its third quarter performance.
"During the third quarter of 2020, the Government of The Bahamas continued measures to curtail the spread of COVID-19 by instituting additional lockdowns, curfews and limitations on social gatherings. These factors contributed to a less than favourable third quarter for the company given that commercial activities were limited due to the factors described and the strain on consumer’s disposable income.
"Commonwealth Brewery's management has been able to achieve financial stability through early actions taken during the first quarter of the year by increasing short-term financing. This proved pivotal to Commonwealth Brewery's ability to navigate periods of lockdown during which revenue has severely reduced due to the halt of economic activity. This short-term financing strategy has been sustainable through the third quarter with the company not requiring further financing."
Commonwealth Brewery underwent a redundancy exercise as recently as early 2019, when it released 73 employees from its 700 Wines and Spirits retail division. This included 53 from their New Providence stores, with the remaining 20 coming in Grand Bahama.
Yesterday's released said: “In accordance with the Employment Act, the company notified the minister of labour of its position and is in the midst of a consultation process with these employees. All employees who may be made redundant will be paid their full salary and benefits into the New Year.
“In fact, Commonwealth Brewery is firmly committed to handling the entire exercise with respect, transparency, speed and support to those who may be impacted. Since the start of the crisis, the company has implemented a number of cost saving measures that has lessened the impact to its team.
"Those cost saving measures have allowed the company to retain more than 90 percent of its team members who will be instrumental in helping Commonwealth Brwery position itself for recovery and growth and 2021.”