The management of Guinness Nigeria, on Thursday announced through the Nigerian Exchange, plans by Diageo, its parent company to establish a new, wholly owned spirits-focused business with effect from April 2024 that will enable the Nigerian arm focus on its core business of beer brewing.
The move is billed to reduce the company’s “foreign exchange requirements and mitigating the negative impacts of lingering foreign exchange scarcity and exchange rate volatility on the financial performance of the Company.”
The new firm, the company said in its statement, will “manage the importation and distribution of its international premium spirits portfolio in West and Central Africa, with Nigeria as one of the hubs with effect from April 2024, it will no longer import or distribute certain Diageo international premium spirits products.”
The products, according to the statement by Rotimi Odusola, the Company Secretary/Corporate Relations Director, include: Johnnie Walker, Singleton, and Baileys and others imported under its 2016 Sale & Distribution Agreement with Diageo plc, which the statement said is in line with Guinness Nigeria’s long-term growth strategy, besides aligning with Diageo’s plan.
Aside positioning Guinness Nigeria to focus on its core business and strength in the manufacturing, marketing and distribution of non-alcoholic drinks, beer, and its locally produced spirits, the move is also aimed at “enhancing sustainability, growth, and value creation for all stakeholders” of the company.
This change, it is believed, “will enable the full utilisation of Guinness Nigeria’s asset base and will accelerate innovation in local spirits products.”
To assure that the decision will not have any significant impact on its financials, Guinness Nigeria noted that at the end of its financial year ended June 30, 2023, the portfolio of imported Diageo international premium spirit products contributed N14bn, or approximately 6% to Guinness Nigeria’s total revenues.
Guinness Nigeria, the statement further assured, “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.
The decision, it further added, will not in any way affect Diageo plc’s shareholding in Guinness Nigeria, as it remains a key shareholder of Guinness Nigeria which “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.”