• Saturday, May 18, 2024
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BusinessDay

Beer market: No end in sight to fierce competition

If you can’t beat them, join them’ seems to be the game in the Nigeria’s competitive beer industry as Guinness Nigeria may have overlooked the alleged guerilla marketing or de-marketing issues in the beer industry to launch its own strategic competitive marketing campaign called ‘Guinness Collabo’.

Under the internally launched campaign, Guinness is requesting retailers to collaborate for a reward. The retailers need to sign in to the campaign to participate. “Be a winner and make more profits”.

In the first of the four criteria campaign conspicuously placed at the reception in their head office at Ikeja, Guinness is requesting retailers to “ensure you always have 8 of our core products available in you bar”. Secondly, the retailers should ensure they have any of Guinness innovation brands available in their bar. Thirdly “ensure you always have our brands of premium spirits in your bar” The forth criteria is that retailers should “always make sure the Guinness chiller is fully stocked according to GNPlc planogram and that only Guinness products are in the Guinness chiller in your bar”

An analyst who has been following the alleged de-marketing or guerilla marketing trend in the beer industry said perhaps the Guinness new campaign is a strategy to respond to competition and reclaim any possible lost ground as a result of competition behaviours. Sesan Sobowale, Guinness company secretary confirmed to BusinessDay recently that the company has “a route to consumer project that is currently on-going where we are supported by executives from Diageo and we are working with consultants to improve our route to consumer around Nigeria” In the beer industry, another competitor is alleged to have involved in guerilla marketing in the industry, an issue that has generated heated comments in the recent time.

“Obviously de-marketing where players in the market influence retailers on what to sell is against the consumers’ choice.  Imagine a situation where consumers will enter a bar and demand for a particular beverage which ordinarily the bar is expected to have, but the response is that that particular beverage is not available and the bar attendant decides to offer you the competing brand” The analyst thinks that this situation whether influenced by competitor or otherwise is not in the best interest of the consumer.

The analyst who agreed that any retailer is free to sell any product of his/her choice said it is wrong when another body or organization in any sector induces the retailer not to accept the products of a competitor.

Other observer was of the opinion that the alleged de-marketing is perhaps existing in the Nigerian market because of what they described as lack of appropriate law to guide competition in the country.

According to the analyst, any of the players may be capitalizing on a gap in the system to engage in such guerrilla marketing.”The issue borders on competition. In Nigeria as today we do not have competition law. Stakeholders have made a case for competition law to be passed which is before the National Assembly. The law is at second reading at the assembly. The content of the law goes to the root of stopping monopoly and ensuring fair play by businessmen”

It is believed that the Federal Competition Commission Bill when passed would be a legislative guide in the regulation of such competition among Nigerian businesses.

“The need to ensure fairness in economic activity has always been part of Nigerian economic principles. However, no legislative activity has been carried on to achieve this end on an industry wide basis. It would appear that owing to the previous status of public ownership and monopoly over major commercial enterprises and means of production, there was really no point in regulating competition as most public entities enjoyed exclusive or special rights as a result of their nature as government entities”, Francesca Aihevba said while assessing the competition bill in a report.

It is also believed the silence by some consumer regulatory bodies on the alleged de-marketing issues could have been informed by the absence of such competitive law as their functions may not have covered such unfair market practice.

Disturbed by the ongoing de-marketing issue among brewing industry, Consumer Rights Advocacy Network of Nigeria in a recent publication called on relevant government agencies, including the CPC and the National Competitiveness Council of Nigeria to take action against what it called the ongoing pirate marketing practices in the alcoholic beverage industry.

A source close to the Consumer Protection Council head office said the agency which is against monopoly and in support of consumer right is yet to take a position on the alleged guerilla marketing in the beer industry while a source in APCON told BusinessDay that nothing at the moment violets the APCON code. It said “evidence points to the fact that a prominent brewery is de-marketing its competitor by inducing distributors and retailers not to take on, display or sell the products of their competitor”. It described the practice as a crime against the consumer.

Guinness Nigeria and Nigerian Breweries are two leading companies in the beer and malt beverages. The rival between the duo has heightened in the recent time. Over the years, the struggle for market leadership in many of their brands has taken many dimensions, with APCON and other bodies intervening on some occasions.

If this fierce competition continues on this rising trajectory with more other players copying the trend because nobody is talking, then the market is in danger for it. This is the time to stop this in the interest of consumers, the industry and employees.

Daniel Obi