Heineken in Africa is a very readable work by an investigative journalist. Historians, international business academics, and economists will search in vain for answers to some of the questions they wish the author had addressed. But they will find tantalizing data in the author's many stories about Heineken's experiences based on his interviews in twelve of the thirteen African countries where the company has majority ownership of local breweries—Algeria, Tunisia, Egypt, Sierra Leone, Nigeria, Ethiopia, Republic of the Congo (Brazzaville), Democratic Republic of the Congo (Kinshasa), Rwanda, Burundi, South Africa, and Mozambique, missing only Côte d'Ivoire—and, eventually, his access to Heineken managers and archives at headquarters. Olivier van Beemen's focus on decisions that raised ethical issues makes the book especially valuable for those interested in corporate social responsibility.
The book itself has an unusual history. Initially, Heineken refused to grant the author interviews and access to archives. The outcome was a more limited Dutch version published in 2015. Resulting public criticism of what had been considered a model Dutch company led Heineken to allow access for this revised version, published in Dutch in 2018 and in English in 2019.
Heineken, founded in Amsterdam in 1873 (the company's website indicates that the Heineken family retains control of the firm: https://www.theheinekencompany.com/About-Us/Ownership-Structure), initially sold beer primarily in Paris and the Netherlands. By the late nineteenth century, it was exporting to the Dutch East Indies, Singapore, Brazil, and the Caribbean. Foreign brewing, the book suggests, began in 1930 with the partial acquisition of a Swiss firm with Moroccan and Egyptian breweries, followed in 1935 by an acquisition that included breweries in the Dutch East Indies, the Belgian Congo, and Angola, as well as France and Belgium. By 2011, van Beemen reports, Heineken had 165 breweries in more than seventy countries; the book does not provide a comprehensive list of these breweries, much less of dates, partners and their shares, and products sold.
Three issues seemed of special interest to the author: investment in authoritarian countries that provide support to the regime; provision of beer and money to rebels and, in the case of Rwanda, participation in genocide; and abuse of “promotion girls.”
In Burundi, the state held 41 percent of the Heineken brewery and could appoint some board members, including the chairman. When Burundi's president was assassinated in 1993, his body was temporarily held in Heineken's cold storage. Heineken provided 30 percent of government revenue and a lucrative appointment for the president of the Constitutional Court, which the author implies was a reward for the court's authorization of a third term for a repressive Burundi president. Other stories provide similar examples of Heineken's involvement with autocrats and implicit support of their governments.
In Rwanda, Heineken continued to provide beer during the 1994 genocide as alcohol fueled killings. Dutch managers left for Goma, across the Congo border, apparently continuing to manage the operations. Here the author's preference is rather clear: production of beer should have been stopped. But might the brewery have continued production even without Dutch supervision?
In Africa, Heineken (like other beer companies) employs “promotion girls” charged with pushing beer sales in bars. Customers consider them fair game for groping and for invitations for the night. According to van Beemen, the company required them to wear short skirts and provided low pay; management sometimes demanded sex for employment. The author's initial public exposure of the situation generated pressure in the Netherlands for Heineken to provide better protection or stop using “promotion girls.” In this edition, the author questions the effectiveness of reforms.
Van Beemen's research raises other ethical issues: Heineken's tacit support for apartheid and white rule in southern Africa before 1991; use of abusive transfer pricing, royalties, and other payments to mysterious Swiss and Belgian entities to avoid local taxes; seeking of unnecessary tax incentives; unsupported health claims about beer; exaggerated claims of the development benefits of the firm's investments; and unconstrained promotion of beer brands, including in schools. The author does not claim that the issues reported are unique to Heineken. Indeed, this reviewer's experience suggests that one could find parallel stories for many other multinationals in Africa.
International business scholars will regret that the author provides little information on Heineken's complex corporate organization, mentioning only increased centralization of decision-making over time. Did other shareholders recognize the impact of profit shifting on them? Was Heineken-labeled beer uniform across markets? Why did Heineken offer so many brands of beer in Africa? Were marketing programs standardized? If not, were they entirely locally developed? What were corporate advantages that sustained multinational beer firms? Beer is not difficult to produce, as new craft breweries have confirmed. Why were expat managers left in-region for such a long period? Does this not undermine the development of a corporate culture and understanding of appropriate behavior? What were local government requirements for local ownership, and could Heineken choose how they were met?
Economists will miss information on protection from imports and estimates of domestic value added by the breweries. Seemingly half-hearted efforts to grow agricultural inputs locally are described, but what about bottles—for which government requirements to use only local bottles has sometimes meant scarcity: “no bottles, no beer” led the Ford Foundation to provide this reviewer with a crate of empty beer bottles on his arrival in Ghana in 1968.
Chapters of the book could usefully be assigned in a course on corporate social responsibility. Should no multinational invest in authoritarian counties? Is it inappropriate to have partners who are politically influential, even if some local ownership is required? Should a firm shut down production if violence arises, especially if its product plays a role? Should a company pay “tolls” to rebels at roadblocks or provide ethnic information on employees to genocidal squads? Should firms take over what would be government roles in more advanced countries, such as limiting alcohol promotion, monitoring claims of health benefits, and discouraging cartelization of markets? And, very importantly, where in a multinational firm should such decisions, with corporate-wide implications, be made?
