Guinness Nigeria faced a significant financial setback with an after-tax loss of ₦61.7 billion in the nine-month period ending on March 31, 2024, compared to a profit of ₦5.9 billion during the same period in 2023, even with the rise in prices. In the past year, the brewer’s Revenue increased by 28 percent, totalling ₦220.3 billion, up from ₦172.5 billion. In the third quarter of 2024, Guinness disappointed with its performance. Despite strong results in terms of revenue, the company reported a pre-tax loss of ₦56 billion.
Increase in revenue was mainly due to higher prices, with average product prices rising by 43 percent year-to-date in the beer and mainstream spirit segments, according to analysts at FBNQuest. Analysts attributed the increase in net Finance costs mainly to an unrealized FX loss of approximately ₦32.1 billion. They noted that while the company’s net debt decreased by 2.8 percent to ₦29 billion year-to-date, this was primarily due to a 38.2 percent decrease in borrowings, offset somewhat by a 25.7 percent reduction in cash reserves.
It raised prices across its product line citing increased production costs.
Adebayo Alli, the CEO and Managing Director of Guinness Nigeria Plc, expressed optimism about the ability of the company to overcome challenges in the current economic climate. Despite facing obstacles, he believes in the strength of the business and its capacity to adapt to changing consumer choices through Innovation and operational improvements. He highlighted that the company has placed a stronger emphasis on engaging with consumers and providing support to Trade partners through their digital channels.
More so, the significant revenue growth in categories like non-alcoholic malt, ready-to-drink beverages, and premium international spirits serves as evidence that these strategies have been successful. In May, Guinness Nigeria raised prices across its product line, citing increased production costs and operating expenses as the reason for the adjustment. The price of selected brands by Guinness Nigeria was said to be increasing starting from the day of announcement as said in a notice titled Price Increase by Guinness Nigeria Plc – Selected Brands, signed by its Ag. commercial director Olusanya Adesanya.
The cost of Guinness products has seen a significant rise.
Also, Guinness Nigeria has announced that due to the current economic conditions affecting the prices of production materials and overall business costs, they will be implementing a price increase on certain SKUs within their Beer and MSS category. It was announced that starting on March 13, 2024, the new pricing system will go into effect. More information regarding this change was to be provided at a later date, according to the statement. Guinness reminded its customers to be aware of the conditions associated with the price increase.
Customers can only purchase up to one week’s worth of stock at the old pricing before the increase goes into effect, depending on availability. The products impacted include various drinks such as Guinness Stout, FES, and Smooth, as well as Malta Guinness, Dubic Malt, Smirnoff Ice, Orijin, Gordon’s Pink Berry, Sunset Orange, and Moringa Citrus, plus Smirnoff X1 Smooth and Choco, Captain Morgan, and Orijin Herbal Gin. The cost of Guinness has seen a significant rise, with prices now ranging from ₦800 to ₦900, marking an 80% increase.
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Similarly, Big stout has also experienced a price hike, selling at ₦1000 from its previous price of ₦700, representing a 43% increase. The price of Trophy went up by 40%, now selling for ₦700 instead of ₦500. Meanwhile, Guilder is priced at ₦1000, up from ₦600, showing a 67% increase. Established in 1962, Guinness Nigeria is a subsidiary of Diageo Plc from the UK. Its first Brewery was constructed in Ikeja, marking the inaugural Guinness venture outside of Ireland and Great Britain. As the years passed, additional breweries were established, including the Ogba brewery in 1963 and the Benin City brewery in 1973.