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.
According to reports, the 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.
Guinness in its notification said that the move is in line with its long-term growth strategy, and is also in alignment with Diageo Plc’s decision to establish a new, wholly owned spirits-focused business to manage the importation and distribution of its international spirits portfolio in Nigeria as well as West and Central Africa.
It also stated that it will continue to manufacture and distribute its full portfolio of non-alcoholic drinks, beer and locally produced spirits, including Orijin, Captain Morgan Gold, Gordon’s Moringa, and Smirnoff X1 Choco, fully utilising its asset base.
The statement from Guinness partly reads, “Guinness Nigeria today announces that, with effect from April 2024, it will no longer import or distribute certain Diageo international premium spirits products, including Johnnie Walker, Singleton, and Baileys and others imported under its 2016 Sale & Distribution Agreement with Diageo plc.
“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.
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‘’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.’’
Guinness listed the benefits to include focus on its core business and its strength, reduction in foreign exchange requirements as well as to navigate the negative impact of forex scarcity on its account books among the benefits of the decision, among others.
It stated, ‘’ 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.”
