Guinness Abandons Johnnie Walker, Singleton, Baileys, to Focus on Non-alcoholic Drinks, Beer, Others
- From April 2024, Guinness Nigeria will stop importing some international premium spirits products
- The Diageo subsidiary noted that the development is in line with its Nigerian long-term growth strategy
- It, however, stressed that there are no changes to Diageo Plc's shareholding in Guinness Nigeria
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Guinness Nigeria has announced that it will stop importing and selling specific Diageo worldwide premium alcohol goods as of April 2024.
This, it claimed, includes products like Baileys, Singleton, and Johnnie Walker that were imported in accordance with its 2016 Sale and Distribution Agreement with Diageo plc.
Guinness Nigeria PLC made the statement in a disclosure to the Nigerian Exchange Limited.
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According to the statement, the action is consistent with Guinness Nigeria's long-term growth strategy and Diageo plc's desire to launch a new, wholly owned spirits-focused company.
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It stated that this is intended to control the importation and distribution of its portfolio of premium international spirits in West and Central Africa, with Nigeria serving as one of the hubs.
Revenue to be impacted
In the financial year ending June 30 2023, the company stated that the revenue related to Guinness Nigeria's portfolio of imported Diageo international premium spirit products was N14 billion, constituting approximately 6% of Guinness Nigeria's total revenues.
Guinness Nigeria said it will continue manufacturing and distributing its entire portfolio of non-alcoholic drinks, beer, ready-to-drink (RTDs) and locally produced spirits.
According to the company, this includes 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.
Meanwhile, it added that there are no changes to Diageo plc's shareholding in Guinness Nigeria, and Diageo remains a key shareholder of Guinness Nigeria.
Earlier, Guinness Nigeria Plc, a unit of Diageo Plc, said it has no plans to close its operation in Nigeria, contrary to some inaccurate reports.
Charles Abuede, a financial analyst noted that the recent developments surrounding Guinness Nigeria and its parent company, Diageo, have raised concerns among Nigerians and stakeholders alike. He said developments highlights the challenges and inconsistencies in foreign exchange (FX) policies in the country, which have compelled several multinational corporations to make significant decisions in recent times.
Inferring from their audited financials for the fiscal year 2023, Abuedu noted that Guinness Nigeria reported substantial FX losses amounting to over N45 billion. Despite this, he said that they still managed to generate N14 billion in revenue from their imported Diageo international premium spirit products, constituting approximately 6% of their total revenues.
Abuede said that this underscores the complexity of navigating FX challenges in Nigeria's business landscape.
He said,
"What's also evident is the trend among major players in the consumer goods sector, who are announcing substantial shifts and developments in their operations, driven by meticulous analyses conducted by their parent companies regarding their activities in Nigeria. This trend may raise questions about whether these companies are considering exiting the Nigerian market or exploring alternatives to enhance their profitability and facilitate dividend repatriation."
"This situation is a clear reflection of the challenges surrounding the ease of doing business in Nigeria. It sheds light on the FX policies in place and the overall business environment's stability, which has been increasingly burdensome for enterprises. Nigerians should indeed be concerned about these developments, as they reveal the complexity of the business landscape and its impact on multinational corporations operating in the country. It underscores the importance of addressing these issues to foster a more conducive and attractive environment for businesses in Nigeria."
Guinness Nigeria ex-employee takes company to court, becomes N52.5 million richer.
The National Industrial Court in Port Harcourt has asked Guinness Nigeria Plc to pay his former employee Bright Nwosu a total of N52.45 million, Legit.ng reported.
Nwosu, a former Sales Executive with Guinness Nigeria Plc in 2004, pursued legal action following the termination of his employment on September 18, 2019.
The lawsuit marked NICN/PHC/108/2019 was brought before Justice Nelson Ogbuanya.
Source: Legit.ng
