Guinness Nigeria Plc has announced that it will stop the importation and sale of certain Diageo international premium spirit products like Johnnie Walker, Baileys, Singleton and others imported under its 2016 sale and distribution agreement with Diageo Plc.
This disclosure is contained in a notification sent to the Nigerian Exchange Limited (NGX) by Guinness Nigeria on Thursday where it stated that the decision to no longer trade in the products will wipe off 6% of the total revenue of the Nigerian brewer.
This move is in line with Guinness Nigeria’s long-term growth strategy, and it is also in alignment with Diageo plc’s decision to establish a new, wholly owned spirits-focussed business to manage the importation and distribution of its international premium spirits portfolio in West and Central Africa, with Nigeria as one of the hubs.
In the financial year ended 30 June 2023, the revenue related to Guinness Nigeria’s portfolio of imported Diageo international premium spirit products was NGN14billion, constituting approximately 6% of Guinness Nigeria’s total revenues.
Guinness Nigeria will continue to manufacture and distribute its full portfolio of non-alcoholic drinks, beer, ready-to-drink (RTDs) and locally produced spirits, including inter-alia Orijin, Captain Morgan Gold, Gordon’s Moringa, and Smirnoff X1 Choco, fully utilising its asset base following the expansion of its production capacity in recent years as a foremost total beverage alcohol player.
There are no changes to Diageo plc’s shareholding in Guinness Nigeria, and Diageo remains a key shareholder of Guinness Nigeria.
Benefits for Guinness Nigeria
Guinness Nigeria will be better positioned to focus on its core business and its strength in the manufacturing, marketing and distribution of non-alcoholic drinks, beer, RTDs and its locally produced spirits, thus enhancing sustainability, growth, and value creation for all stakeholders of Guinness Nigeria.
The change will enable the full utilisation of Guinness Nigeria’s asset base and will accelerate innovation in local spirits products.
This strategic change reduces the Company’s foreign exchange requirements and mitigates the negative impacts of lingering foreign exchange scarcity and exchange rate volatility on the financial performance of the Company.
John Musunga, Managing Director/CEO, Guinness Nigeria, said: “This change will better position Guinness Nigeria to focus on our core business, which has consistently delivered growth over the years, despite the challenging external environment. The focus on our core strengths will benefit from the investments we have made into expanding capacity at our breweries in Ogba Lagos state and Benin Edo state to meet the growing demand for our beer and highly successful local spirits brands. It will also strengthen our manufacturing, marketing and distribution capabilities and reduce our forex exposure while enhancing sustainable growth and value creation for all stakeholders of Guinness Nigeria.”
Guinness remains a strong Nigerian company committed to ensuring that its strategic and operational actions deliver value to our esteemed stakeholders by advancing Guinness Nigeria’s performance and sustaining business profitability.
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