Heineken in Africa is a brilliant and exhaustive investigation into a corporate giant’s claims of its positive actions on that continent. What Olivier van Beemen uncovers is that the company – far from being a force for good – is implicated in involvement in tax avoidance, human-rights abuses, and high-level corruption. It has collaborated with dictators and brutal anti-government rebels, and has crushed competition from indigenous brewers.
This is Beemen’s first book and is the fruit of five years of intensive research into the true effects of the corporation’s actions on the continent. He found that virtually all publicly available information about corporations like Heineken came from the companies themselves, who (unsurprisingly) emphasize the positive effects of corporate actions and avoid putting the spotlight on the negatives.
Unlike many other journalists and scientists, Beemen gathered most of his information on the ground, visiting every African country, except Ivory Coast, where the company controls a brewery: Algeria, Tunisia, Sierra Leone, Nigeria, Ethiopia, Congo-Brazzaville, the Democratic Republic of Congo, Rwanda, Burundi, South Africa and Mozambique. He read all available literature, combed through company archives, received confidential documents and USB sticks full of information, and spoke with four hundred sources in and around the company (p.xiv).
Before the Dutch version of the book was published (in 2015) Heineken had refused all interviews with Beemen and chose not to react to the manuscript. In 2017 Heineken had a change of heart, and Beemen was allowed extensive talks with CEO Van Boxmeer, which resulted in a reworked and updated version of the book to which were added many fresh revelations and insights. These include an elaborate corruption case, and Heineken’s use of thousands of prostitutes for a publicity campaign in Nigeria. What is even more alarming, he discovered that in Rwanda the company ‘had been more entangled’ in the 1994 genocide than he had realized (p.xiii).
Heineken was not happy about what van Beemen had to say about its operations in Africa, accusing him of being ideologically biased against the presence of multinational corporations in poor and unstable countries. Van Beemen’s response is that ‘in reality, I think business can indeed play a positive role, but this should not be an automatic assumption’ (p.219).
‘Don’t turn this into a crusade,’ Beemen was warned by Heineken CEO Van Boxmeer (p.xiii). Beemen reassured him that this was not his intention; in his book he categorically states that:
This is not an indictment of Heineken specifically but a piece of thorough research into the ways of a multinational in Africa, the continent many see as the next big thing for business. As far as I have been able to examine, the Dutch beer brewer’s behaviour resembles that of its competitors and other Western companies in many respects, and I do not consider it my mission to show where Heineken performs slightly better or slightly worse than the rest (p.xv).
Heineken refused all public discussions on the subject, but after publication the company launched a new publicity campaign designed to create good feelings:
Heineken stands for “pure”, “refreshing”, “dependable”, “clear” and “magical” (p.216).
Dutch beer and neo-colonialism
Beemen’s intention was to show the darker side and true-to-life image of a company keen to show off its supposed success story in Africa, for which it has received a lot of praise, including from the Dutch Queen Maxima, and a peon of praise delivered by Prime Minister Mark Rutte to the UN General Assembly, calling it ‘the world famous Dutch beer brewer’. The right-wing Dutch daily De Telegraf, described the enterprise as being ‘in the best traditions of the VOC (the Dutch East India Company), not as an accusation of neo-colonial practices but as a compliment for its boundless entrepreneurial spirit’ (p.xiv).
Beemen begins his documentary with a eulogy on the African love of beer with the words of Leandre Sikuyavuga (deputy director at the Iwacu newspaper in Burundi): ‘Beer enchants the heart.’
‘We worship beer. Beer is part of each important moment in life and every ritual. It starts with birth. A new-born child receives a few drops, to become strong. And don’t forget the mother. While she’s pregnant, she doesn’t drink too much, but after she has given birth she drinks a lot. It improves her milk.” (p.ix)
Beer is advertised everywhere, including on billboard advertisements otherwise showing national symbols. The Dutch multinational Heineken is lord and master of the Burundi beer market and has been for more than sixty years (p.x).
As purchasing power is increasing for many people, the brewers have calculated that African markets will see exponential growth: it ‘has more than forty breweries in sixteen countries and exports its beer to virtually every other market.’ It has been working in Africa for more than a century and started brewing locally in the 1930s (p.x). Neo-colonialism is still alive and well in Africa:
International business considers Africa “the final frontier”, where enormous profits are to be had for daring entrepreneurs with staying power (p.xi).
The production costs are lower than in Europe, and the competition is so little that in a lot of countries one small bottle of beer can be more expensive than in Europe (p.xi).
History: the conquest of Africa
‘Heineken’s Bierbrouwerij Maatschappij’ was established in 1873 in Amsterdam by Gerard Heineken, a man of great ambition. Very soon his beer was being served in what was considered the centre of civilization in those days, Paris, with its dance theatres and grand cafes (p.10).
Heineken’s history with Africa began at the end of the nineteenth century by shipping crates of beer to a few port cities, and since the 1930s brewing beer locally, whereby it gained the knowledge and experience that laid the foundation for its commercial success. In the 1950s West Africa was one of the world’s principal markets, and because of Heineken’s extraordinary tenacity its operations there were very lucrative, even throughout a disastrous period between the 1980s and 90s. The company recognized the continent’s potential; it ‘also resorted to commercial practices that even in those early days were considered controversial – or were, quite simply, illegal’ (p.9).
Heineken’s first port of call was at the Cape, which was run by the British at the time, after which it began exporting to other European colonies including Egypt and Algeria. However, export to the continent was not profitable, due to poor quality of beer after long journeys, broken bottles, theft and fierce competition from other European brewers. Their fortunes changed as the economic crisis of the 1930s hit large parts of Europe, sending dozens of breweries into bankruptcy.
The company then opted for international adventure: in 1930 Heineken bought a stake in a Swiss investment society, and with this move it took joint ownership of one Moroccan and two Egyptian breweries. Subsequently, it bought, amongst others, Interbra, a Belgian holding company with breweries in France, Belgium, the Belgian Congo and Angola, and the parent company of Cobra.
The Dutch were allowed to continue brewing their beer while under German occupation during the Second World War, ‘on the condition that they supplied the occupiers, in adherence to Hitler’s order: “Bier soll sein! (There must be beer!)”’ (p.12). At this point, the director, Stikkler, began questioning the presence of two Jews on Cobra’s Board of Directors. In 1940 Heineken asked the two men to leave, which they reluctantly did. This suited Stikkler very well, who later on became Dutch foreign minister and secretary general of Nato.
Heineken found that its African breweries had survived extremely well during the years of German occupation of the Netherlands, that damage was limited, and in some places, they had done a roaring trade. Thanks to thirsty Allied Forces; ‘Beer and oil kept the war machine going’ (p.12). This unexpected windfall was used to build a new brewery in Lagos, the capital of Nigeria, and with the United Africa Company (UAC) they launched a new brand of beer called Star, which became a huge success. Heineken/UAC went on to build more breweries in Kumasi (Gold Coast, today’s Ghana), Freetown (Sierra Leone) and Moundou (Chad). Success followed success. Heineken expanded into the Belgian Congo, building breweries and factories throughout the region (pp.12-13).
Business continued to boom, the locally brewed beer was extremely popular and highly regarded, but the local Congolese were held in contempt by Heineken staff, who considered them ‘extremely underdeveloped,’ but liable to spend a high proportion of their income on beer. This and fresh competition from the German brand Beck’s (which had quickly regained the ground it had lost because of Germany’s export ban during the war) was a huge incentive to Heineken to continue its expansion on the continent.
Africa for the Africans
Things changed for the Dutch when they were confronted with a new phenomenon, the independence movement; Africa for the Africans. Heineken was not happy about the independence movements:
in Kenya the company complained bitterly that Nairobi, “a virtually perfect European city”, had fallen prey to robberies and violence. “That small group of black rascals is making Kenya very unsafe”, was the reference a sales representative made to the Mau Mau Rebellion of the Kikuyu people against British rule. He made allusions to a solution: a tough colonial response, if not genocide. “Curious to find out whether the English will ever prevail without exterminating the one and a half million Kikuyus (it’s what they’re doing but only on a limited scale because the Labour Party is against it)” (p.15).
Segregation in South Africa and a black population in Mozambique kept in poverty, which ensured automatic segregation – and political calm – was the desired state of affairs for Heineken. It applauded the regime of Antonio Salazar of Portugal, who held on to the colonial empire until the very end. While going through company archives Beemen discovered that in the early 1960s,
Heineken was an ardent supporter of a “white block” of southern African countries, which included Rhodesia, South Africa, Angola and Mozambique, as a barrier to “the pressure from the black race” (p.240).
Nevertheless, Heineken was hostage to the march of history, as colony after colony declared independence. The young nations took protectionist measures to develop their domestic industries, discouraging imports by imposing high duties or banning them. Nasser’s Egypt and Mobutu’s Zaire nationalised their industries during the 1960s and 70s, which compelled many Western companies to leave Africa. This marked the end of Heineken’s ‘golden export story’ (p.16).
Facing pressure to smash the colonial structure, the company then turned its emphasis to local production, in adapting to the situation by bringing African talent to the Netherlands for training and internships, to ensure that they could take on the top jobs in their own countries. Ironically, the new breweries which had been managed by colonialist Europeans continued brewing beer to European recipes, which the young nations saw as their beer (p.17), dismissing the local cloudy brew as old-fashioned.
Because of the cultural importance of beer on the continent, many new leaders found that having your own brand of beer was part of being an independent nation. Two of these new leaders had actually emerged from the beer industry, Julius Nyerere, president of Tanzania, and Patrice Lumumba, Congo’s prime minister. Beer and politics were inextricably entwined.
In order to bump up its profits Heineken (through its company Interbra) began to illicitly syphon off money by using a system that consisted of two types of profit, one that was officially declared to the local authorities, and a part (often much larger) which was hidden, transferred to a holding in Switzerland. By the 1960s the amount of money that was being ‘channelled away from Africa became a problem’ (p.18 and p.240).
After a series of moves, and using every trick the accountancy rules would allow, dodging threats of take-overs and disagreements with Unilever (who feared that the manipulations would prejudice their relationship with the Congolese government), questions from shareholders, and the incorporation of Interbra into Compagnie Lambert (the parent company of the Belgian bank), Heineken and Lambert merged in 1971 to become Ibecor, which ‘probably constitutes the most secretive contribution to Heineken’s profitability’ (p.21).
The 1960s and 1970s were years of a mix of dictatorial rule (ruthless dictators like Amin in Uganda, Bokassa in the CAR and Guinea’s Sekou killed thousands), affluence in some areas, war in others. Zimbabwe and the Portuguese colonies were still fighting for independence. In the 1980s and 1990s there were more civil wars, more dictators, more massacres, from Sierra Leone and Liberia, then the collapse of Somalia and genocide in Rwanda, accompanied by coups, child soldiers, refugees and epidemics.
By this point, Heineken was finding it ‘difficult to make money “legally” in Africa’, so it turned to secondary sources of income, monies received on commissions paid on delivery of spare parts and raw materials – and, reportedly, bribery. These controversial practices had to be kept secret from the Board of Directors, which was done through Heineken’s subsidiary Ibecor, an important contributor to the extraction of millions of guilders per year from an impoverished and battered Africa (p.27).
The year 1999 was a turning point for Heineken; it wanted to rid itself of the post-colonial approach often seen in Africa. In order to change mentality and management styles, 750 African managers were brought to Amsterdam for intensive training (p.28). In 2005 Jean-Francois van Boxmeer, ‘a man with a passion for Africa’ was appointed as president of the Board of Directors. Heineken then embarked on a series of takeovers and expansions and investments throughout Africa. So, for more than a century the company has managed to survive even through difficult times, often, it seems, relying on dubious practices and fraud, to pump millions out of the continent.
Heineken has not refrained from operating in areas of conflict and civil war; in fact, it has found that such situations offer rich opportunities for profit making. Neither has it held back from operating in countries ruled by dictators.
President Zine el-Abidine Ben Ali ruled Tunisia with an iron grip, and considered the country his private property; he, his wife and their families helped themselves to ‘all the riches of the land, both in the public and private sector.’ Neither opposition nor criticism was allowed, torture and executions were common, and all gatherings of human-rights organisations and journalists were banned. Heineken found Tunisia a perfect place for a new subsidiary, and in a confidential investment proposal praised it as being ‘politically and economically stable’ (p.173).
In Burundi it kept ‘a succession of autocrats in power, without any tangible benefits to the country’ (p.180). It reportedly had no problem with bribing high-ranking government officials in the Congo, nor did even the Sharpeville Massacre in apartheid South Africa deter it from investment there, while the company rejected the idea of a massive trade embargo against the apartheid regime. But the worst of Heineken’s activity in Africa was the role it played in the Rwandan genocide. While corpses piled up across Rwanda it continued to operate, providing large parts of the country with freshly brewed beer. Tutsi drivers were replaced with Hutus; anti-aircraft guns and soldiers were put in place to protect the facility (pp.199-200).
Alcohol consumption played a major part in the atrocities and beer was used by wholesalers and other influential people to encourage inexperienced killers. Heineken kept the beer flowing freely throughout the genocide. According to former staff and workers, the role that beer played in the atrocities was never considered reason enough to halt production (p.202). “Business is business. For us, volume was paramount”, one former employee is quoted as saying (p.203), which pretty much sums up Heineken’s activities in Africa.
Corporate reputation and African reality
In the Congo, Heineken used its cooperation with a group of criminal rebels to get rid of large numbers of its workers and avoid paying the correct severance packages. It is only after years of struggle that a group of 168 Congolese workers finally have been compensated, resulting in a series of modest payments – which the company insists should not be called indemnities, and remain secret, yet:
Heineken gets praise for its transparency. The settlement means there will be no further proceedings by or on behalf of this group of ex-workers relating to alleged complicity with war crimes. Quite the reverse: the company gets recognition as a wise, honest and generous actor, a corporate example even, a place where you go if you need advice on “best practices”, to use the insider jargon. Two years after Prime Minister Rutte’s speech [in admiration for Heineken] at the UN General Assembly in New York, the company is again praised at the UN, this time in Geneva. Yes, Heineken never ceases to amaze (p.238).
On his visits to some of the poorest and least developed countries in the world, where local business was virtually non-existent and government was unable to provide basic services, there was always ‘this well-oiled commercial machine called Heineken, producing perfectly fine beers in modern factories and sending it to the remotest – but no less thirsty – areas everywhere’ (p.239).
So, has Heineken done well in Africa? It continues to profit financially on a huge scale, and, thanks to its enormous propaganda marketing and PR capabilities, basks in an aura of being a force for good in the region, having – Teflon-like – shed the muck it has been instrumental in creating. Its activities in Africa demonstrate capitalism’s ability to change with the times; it continues to hold its colonialist ambitions in Africa, draining away money that reportedly should have been paid in taxes – the lifeblood of newly independent countries trying to grow their economies and improve conditions for their citizens.
As for Africa, and most of the African people, the picture is one of poverty and deprivation. They continue to suffer the effects of corporate collusion with corrupt governments and the draining of tax revenues from their economies, which result in inadequate health provision, poor and often non-existent education, and lack of job opportunities (contrary to Heineken’s claims that it has created thousands of jobs).
African soils have been degraded by industrial agricultural practices promoted by Heineken, and small farmers have been driven into destitution. The economic and social impact of the huge amounts of alcohol the company releases into communities has led to enormous social problems related to extensive alcohol consumption, promoted in publicity campaigns, sometimes including the use of prostitutes (p.xiii). The list of factors that has kept a continent poor despite so much potential for the benefit of the majority of African people is long; the emancipated countries of Africa still have a long way to go in fighting for their freedom from this latest form of capitalist colonialism.