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Heineken-Distell deal: Brokers demanded sexual favours of temporary workers, tribunal hears

Publication: News 24
Author: Nick Wilson

The Competition Tribunal is hearing arguments ahead of its decision about whether Heineken's takeover of Distell should proceed.

  • The Competition Tribunal is hearing arguments ahead of its decision about whether Heineken's takeover of Distell should proceed.
  • A non-profit organisation argued that the companies should give temporary workers more rights, claiming that labour brokers were demanding sexual favours in exchange for these jobs.
  • Meanwhile, Heineken says a maximum of 230 "duplicate" roles could possibly be axed as a result of the merger.


A non-profit organisation representing vulnerable workers told a hearing into Heineken's R40-billion merger with Distell how supervisors at third-party labour brokers allegedly took advantage of temporary workers at the companies' operations by demanding sexual favours in exchange for jobs.

In her submission to the Competition Tribunal hearing in Pretoria on Friday, Nonhlanhla Makhaula, an organiser for the Germiston-based Casual Workers Advice Office (CWAO), said the temporary workers placed by these labour brokers had no job security, rights or provident funds and were subject to the whims of supervisors working for these third parties.

While some would be added to a phone list and then contacted via SMS when their services were required, the most vulnerable were women, who she said were often targeted for sexual exploitation.

These women had no job security and were in desperate financial situations because they only had ad hoc working shifts, making them very vulnerable.

She was responding to questions posed to her by Advocate Jatheen Bhima, who is briefed by the Centre for Applied Legal Studies (CALS) acting on behalf of CWAO. The CALS is also representing the Stellenbosch-based Women on Farms Project (WFP), a non-profit body working with farming communities.

As part of the case that WFP and CWAO are making, they argue that the business models of Distell and Heineken are dependent on a proliferation of seasonal and ad hoc workers They argue that no "vulnerable" workers were consulted at all about Heineken's tie-up with Distell. Makhaula said she would like for temporary workers to be afforded more rights with the solution being the offer of permanent work for them so they work directly for Distell and Heineken, rather than any third parties. Earlier in the day another organiser for CWAO, Jacob Potlaki, related how casual workers were treated differently from permanent employees, saying they received no benefits because they were not permanent.

Given that information supplied by the two witnesses was new and had not been entered into as part of the original submissions, Advocate Robin Pearse, SC, who is representing Heineken and Distell at the hearings, chose not to cross-examine the witnesses, saying the allegations required further investigation.

He said he was authorised to record that the "merging parties will undertake a thorough audit" of the adherence of third party service providers to the standards required by both companies in their agreements including the provision of lawful and dignified working conditions.

230 'duplicate' jobs
Meanwhile, earlier on Friday, Heineken's Joost Broekmaat, who is the integration lead for the intended transaction, told the tribunal that only a maximum of 230 duplicate roles could possibly be axed as a result of the merger, saying this was a "worst case from which we hope to stay far away" and would only affect managerial positions.

At the same time the parties had committed to the Department of Trade, Industry and Competition (DTIC) to keep the aggregate number of staff intact for five years. This meant that if there were any retrenchments because of duplications, they would endeavour to keep the aggregate staff complement constant by hiring else across the organisation. As it now stands there are more than 4 000 staff working for both companies in SA.

He said no production jobs would be affected at all because Heineken, which is the world's second largest brewer, and Distell's production facilities did not overlap at all, with the Dutch company producing beer and the JSE-listed liquor group producing cider, wine and spirits. Broekmaat also told how talks about merging Heineken and Distell dated back to 2019 but were temporarily halted when the Covid-19 pandemic arrived in SA at the end of March.

Talks between the two parties started again in November 2020 before they were formally announced to the market in 2021.

Shareholders in Distell have already approved the deal, while the Competition Commission has also recommended the merger go ahead but with conditions.

These include, among other things, the two parties committing to the DTIC to invest R16 billion over a period of five years, including building a new brewery, as well as protecting jobs.

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