Erik Carl Kettner had a dilemma.
The Dutch employee—appointed by Heineken to head up the recently acquired Pyramid Brewery in Cairo—wanted to teach his charges about the Ten Commandments of Management. It was necessary to convey the importance of efficiency, organization, and training; to prioritize communications, supervision, and discipline. There was the bundled commandment of cleanliness, order, and maintenance to convey, and lessons on human relations and character.
Kettner had learned these tenets at lectures at the Central Social Employers Association (Centraal Sociaal Werkgevers Verbond) in the Netherlands, but was looking for a more lively way to reach his new employees. So he held a competition among the department heads to see who could reproduce them best. After collecting the answers, he announced the winners to the whole company: the ‘Awad brothers, who were in charge of the brewery’s cellars.
The event was meant to start a conversation about the managerial Ten Commandments, and Kettner thought it was a great success, and that he had been given an “invaluable perspective” on some of his employees. He did note that two of the department chiefs did not participate, but that didn’t bother him at the time.
Between the buzzwords and the team-building, Kettner’s exercise would fit right in with contemporary corporate culture. It’s not hard to imagine it running at a large-scale brewery right now. But this contest took place in 1959 in a country that was actively reckoning with its colonial past, and trying to chart a new, independent economic future.
Relations between the brewery’s Dutch management and its Egyptian workforce were being renegotiated daily as the Egyptian government aimed to redress foriegn economic domination and flirted with nationalizing the whole private sector. As evidence of this tension, Kettner would eventually come to believe that one of the department heads who had skipped the competition, Hassan Tawfiq, was conspiring against him to rid the company of all its foriegn workers.
This contest was well-meaning, but, in general, the moves Kettner and Heineken would make in response to the ground shifting underneath them would only inflame relationships within the company. The working environment would quickly turn toxic.
As a result, Tawfiq wouldn’t be the only Egyptian bogeyman Kettner would come to believe in.
The British invaded Egypt in 1882, ostensibly worried about the Egyptian Crown’s unpaid debt. They feared the Urabi Revolution, an uprising led by dissatisfied Egyptian soldiers, and were concerned it would put Egypt into arrears. The debt was built upon cotton futures and accrued in the monarchy’s quest to make Egypt a peer to Europe.
A great deal of that spending happened under Khedive Ismaʿil (1830–1895), who wanted to turn Egypt into a modern state. That meant spending heavily, and using foreign credit, on Egypt’s police force, army, and bureaucracy, as well as investing in cultural landmarks (the Cairo Opera House, theaters, palaces), infrastructure (railways, telegraphs, etc.), and education.
Although Egypt won nominal independence in 1922, the British would oversee its military, legal system, and economy until 1952. In that year, a group of disaffected army officers—the Free Officers, as they came to be called—overthrew the Egyptian monarchy. They formed the Revolutionary Command Council (RCC) and positioned themselves as the first native rulers of Egypt in centuries, a force committed to decolonizing the country.
It was from this revolutionary group that the charismatic general Gamal Abdel Nasser emerged as Egypt’s president, and became an era-defining leader in the country and the Middle East at large. Most relevant to this story was the new president’s economic policy, a mix of economic nationalism and socialism. With the goal of creating an Egyptian economy for Egyptians, Nasser’s rhetoric and actions—like nationalizing the Suez Canal in 1956 and passing legislation to increase Egyptian representation in private companies’ boards and workforces—targeted foreigners and their local collaborators as pilferers of Egypt’s material wealth. Since colonialism, and the white supremacy it was built upon, had a real, deleterious effect on Egypt’s economic development, these policies struck a chord.
Against this turbulent backdrop, Heineken—which had seen great opportunity in Egypt’s then-thriving beer scene, and had invested in local breweries—found its fortunes suddenly in turmoil.
Some might be shocked to learn that there was a beer industry in the Muslim-majority country of Egypt, but it was real, vibrant, and profitable. So profitable, in fact, that Heineken heavily invested in it for more than two decades.
While its beer had been in Egypt since the turn of the 20th century, Heineken only turned its focus to the country in 1937. The Dutch company was impressed by the work of Crown and Pyramid Breweries, which were founded a year apart—1897 and 1898—in Alexandria and Cairo, respectively, by Belgian industrialists. They had managed, through adaptation to the local market and diversification in the sale of ice and malt, to weather, even thrive, under the volatility of the Egyptian market as it faced booms and busts, the Great War, and a worldwide depression.
Heineken invested—by way of a majority ownership in Pyramid and a minority ownership in Crown—with two goals in mind. The first was to grow and capitalize on the local market. It sought the pounds of the growing middle class of Egyptians who were becoming more comfortable with drinking alcohol, particularly beer. It envisioned Stella, a joint Crown and Pyramid venture, as perfectly tailored to this market segment. The beer was less costly than European imports, but made with the latest techniques in European brewing.
This proved prescient. Stella—not to be confused with Stella Artois—would come to be synonymous with beer in the country, and achieved a huge cultural footprint. It would appear in all forms of media, and its green bottles became an instantly recognizable image. For a time, even the non-beer-drinking Egyptian knew the distinctive star of Stella. For many, it’s still a symbol of a bygone era in Egypt, a source of nostalgia for a secular past.
The second goal was to use Egypt as a hub for further expansion into the Middle East and Africa. According to Heineken’s blueprints, Crown and Pyramid, two of the biggest and oldest breweries in Africa, would lead expansion efforts in the Middle East, North Africa, and Subsaharan Africa.
Twenty years after its arrival, Heineken’s investment was paying off. In 1946, for example, Crown Brewery’s net profits totaled a significant sum of 106,000 Egyptian pounds (one Egyptian pound was worth roughly $2.50 at the time). Meanwhile, Heineken’s global march had continued onwards, and it had since purchased or invested in breweries in Jordan, Lebanon, Syria, Sudan, Congo, and Morocco.
It was with the hope of continuing the good times that Heineken appointed Erick Carl Kettner, in 1957, as the managing director of Pyramid Brewery. A committed company man, Kettner lacked appreciation or understanding of the historical imbalances in Egypt—and ultimately would prove himself ill-equipped at dealing with the changes decolonization brought to the country’s beer industry.
From the start, Kettner and Heineken were wary of the power of the Egyptian government. They saw the nationalization of the Suez Canal and feared what the government could do to Pyramid and Crown, as they felt they were prime examples of foreign influence in the private sector. Concerned, they tried to abide by the government’s mandates. For example, in 1958, they adhered to a legal modification requiring the boards of companies to follow several provisions, e.g. a board could only have seven members, and the majority of the board had to be Egyptian.
But their fear of the government was coupled with a complete lack of belief in its policies. They saw Nasser as an incompetent communist who would doom the country. A joke was making the rounds in Cairo at the time: “Do you know the difference between the United States and Egypt? The U.S.A have Eisenhower and Bob Hope whereas the U.A.R has Gamal Abdel Nasser and no hope.” Kettener felt it neatly summed up the president.
Because they did not believe in what the Egyptian government was doing—and weren’t willing or able to acknowledge their complicity in the harmful colonial system—they made only superficial changes to appease government observers. They shuffled the board members and their titles, but made no substantive changes. Kettner said he took great pleasure in looking over the new laws, as it was imperative for Pyramid to take full advantage of every possible loophole.
If anything, this attitude benefited Heineken, and Kettner’s work was extremely profitable. On his arrival, he oversaw the implementation of Heineken’s tenets of management, and instituted a two-shift system on the bottling line. He also, with the help of Heineken, started work in 1958 and 1959 on a multiyear plant-expansion plan. He even consolidated Pyramid’s beer offerings, choosing to eliminate all brands besides Stella, a European-style Lager; Märzen, a German-style Märzen; and Aswan, a Dark Ale. In 1962-3, Pyramid sold 190,000 hectoliters (162,000 barrels) compared to 70,000 (60,000 BBLs) in 1958.
But that profitability masked what could only be described as a toxic work environment, one rife with adversarial feelings between Kettner and his employees, and fueled by half-measures meant only to appease the Egyptian government. The most significant example of this was his relationship with Pyramid higher-up Isma’il Hafez, which was strained from the moment Kettner arrived.
In one of their first interactions, Hafez, with the aim of making Pyramid appear more vital to the Egyptian economy, suggested that the beer company branch out into partnerships with other industries, including making feed for cattle from its spent grain. Incensed, Kettner rejected his suggestion, saying the company should stick to beer.
Kettner later would concede, while never apologizing, that the idea was not a bad one and that the company would probably have to do its “patriotic duty” in the promotion of the “national” economy. His unwillingness to listen to Hafez was due in part to the ambiguity of the Egyptian’s role in the company. Hafez served both as a managing director (a position that was equal in influence to Kettner’s) and as a head of two departments (the personnel and public relations departments, a rung below Kettner).
Giving Hafez this indeterminate position was a way to appease the government. The amorphous title would appear to officials, who had taken to monitoring all private sector companies, as if he had a significant leadership role. At the same time, it would be up to Kettner and his other directors to define his role.
The lack of definition was troubling to the heads of the other departments, who were unsure whether Hafez was their superior or equal. The same was true for Hafez, who used the ambiguity to continually assert his authority. In particular, he was focused more on being a managing director, like Kettner, and delegated the personnel and public relations work to his clear subordinates.
Kettner, who had little willingness to understand the reasons behind the government regulations, saw Hafez’s behavior as signs of sabotage. While Hafez “on the surface was an extremely dedicated and jovial friend,” he was, in Kettner’s eyes, very dangerous; “untrustworthy, vain, ambitious, and overall a substandard individual.” Eventually, Kettner would come to believe that Hafez’s insubordination was the natural result of his ethnicity. It was only natural for an Egyptian to be devious, he told his superior, Wittert Van Hoogland.
His boss only stoked the prejudice. “You write me furthermore about the shortcomings of Hafez and his intrigues as well as those of your other employees. While this is of course most unpleasant, I believe that in Egypt this is actually more or less normal as the Egyptian Mohammedan urbanite, the so-called effendi, is simply a highly unreliable and incompetent person,” wrote Van Hoogland.
Given that it was enabled by a boss who felt the same way about the Egyptian government, their decolonizing regulations, and the Egyptian people, the atmosphere of racist and Islamophobic resentment that Kettner oversaw would only fester.
The conspiratorial thinking would soon go beyond Hafez. Kettner came to believe the company was infected with “Farghalism,” the tendency of Muslims to use anti-Western sentiment and new legislation to undermine both him and the business. He named the trend after the most powerful Egyptian in the company—Farghaly Pasha, the board president—who, in his mind, was the progenitor of this maneuver.
But it was not only Kettner who was concerned about the company hierarchy. The Egyptians also saw how unserious Heineken was about reform, and sought to leverage what power they had to achieve the true gains the government had promised.
This dynamic was evident when the workers union at Pyramid lobbied for the removal of the Swiss chief of engineers, Mr. Eigenheer. The brewery employees had been unionized since the 1940s in a syndicate that included both blue- and white-collar workers. The union was well-organized and accustomed to striking for better treatment. It had won better pay than workers in similar positions at other companies, forcing management, multiple times, to accede to pay increases and bonuses.
The legislation of the post-monarchy Egyptian government emboldened the union. The government made strong moves in support of the Egyptian worker, with legislation granting greater benefits (including increased severance pay, longer annual vacations, free transportation, and free medical care) and unprecedented job security. This new legislation, passed in 1953, however, was coupled with a ban on labor strikes and laws, meant to stifle the activities of trade unions. Regardless, even these heavily qualified actions aided the workers at Pyramid and Crown.
In this case, the source of the issue was a disagreement between Eigenheer and his subordinate, Anton ‘Awad. ‘Awad believed Eigenheer had a complete lack of respect for him. This perceived lack of respect boiled over when one day Eigenheer sat in ‘Awad’s chair and refused to vacate it. For ‘Awad, this was all the more galling because Eigenheer did so in sight of everyone. As a result, ‘Awad filed a complaint to the board through the union stating that he could not stomach Eigenheer’s lack of “class.”
Kettner found the whole affair ridiculous, and felt it was ludicrous that this incident would warrant Eigenheer’s removal. He attributed the union’s push for the removal of Eigenheer to the rising tide of “Arab Nationalism,” part of a smear campaign against the “advantages” of foreigners in the country. This reaction was also rooted in the fact that Kettner’s work in the company relied on extracting more out of the workers. The two-shift system he instituted on the bottling line had been tried by his predecessors, but had to be scrapped because of worker dissatisfaction. He also looked to alter workers’ schedules, applying for several government permits to allow him to give them more hours.
Kettner tried to mediate the situation by charging Hassan Tawfiq, another Egyptian engineer, to settle the issue. However, Kettner became conspiratorial when Tawfiq only gave a disinterested response. He assumed that it was Tawfiq, either alone or with the aid of ‘Awad, who had concocted the entire affair.
Finding no support, Eigenheer’s fate was sealed. The engineer asked for his own dismissal, and left the company in the spring of 1958. He did this because of the very favorable transfer agreements available to repatriated Swiss citizens at the time. Even still, this would not end the worker-management feuds. The union would threaten a strike a few years later.
This acrimonious situation was untenable, but it would not be allowed to reach a natural conclusion. The Egyptian government, unhappy with private companies’ implementation of its edicts, decided to nationalize most of the private sector in 1962 and 1963. Pyramid and Crown would fall victim to that effort, and would be consolidated into the Al-Ahram Brewing Company. [Disclosure: My grandfather was once the head of the brewery.] The fates of Hafez, Kettner, and Heineken are testament to the upheavals of the era.
There is significant evidence that Hafez served as a government informant on Pyramid and aided in its eventual nationalization. While never confirmed, that would justify some of Kettner’s paranoia. But more saliently, it shows the drastic measures individuals will take when so consistently denied fair treatment.
When Kettner’s time at Pyramid ended, Heineken was unable to find a “suitable” position for him within the company, an indication of a difficult employee. Kettner was not the easiest to work with. He was supercilious and blunt. For example, he told Crown directly, in several letters, that their beer was inferior and they needed to listen to him to save it.
After the companies were nationalized, the Egyptian government was keen on keeping Heineken involved and keeping the money flowing. The trauma of nationalization and a bitter debate over compensation prevented that. Even still, Heineken left a powerful legacy. The management and workers who were trained by the brewery in Egypt and on trips abroad would run a successful public company well into the 1980s, maintaining high brand standards.
Heineken would eventually return, rebuying Al-Ahram in 2002. However, only after Ahmed Zayat, the Egyptian-American businessman and future owner of American Pharaoh—the most recent Triple Crown-winning horse—had privatized it, modernized it (by bringing in foreign experts), eliminated bloat (by cutting staff), redirected it (by focusing on its non-alcoholic offerings), and unburdened it (by selling the century-old factories in Cairo and Alexandria). This reform—removing as much of the remnants of the Nasser era as possible—was all done in the name of making Al-Ahram attractive to foreign investors. And so it remains today, one small part of the Heineken global beer empire, an Egyptian outpost under the control of the Dutch brewer.
This slice of history shows how addressing racial issues in brewing must involve not only policies of equal treatment and hiring, but those that tackle structural issues present in a company’s culture. From top to bottom, employees must understand these actions not as appeasement to over-zealous reformers obscuring a company’s focus on beer, but as fundamental steps to fighting historical injustice in the industry.
Otherwise, you foster an environment that can produce something truly toxic, like this statement from Kettner about Egyptians:
“…[Y]ou cannot hate these people because hatred has something noble in itself, you can only have the deepest contempt.”
Words by Omar FodaIllustrations by Colette Holston
