Nigeria’s biggest brewer by market share, Nigerian Breweries ( NB) Plc has revealed plans to halt its current woeful performance as the battle market share in the beer market heats up.
The management of the company while speaking at the annual financial market forum to discuss its H1 2019 company results, market strategy, and outlook for the year said it is ready to restrategize its product offering and improve on its income.
The makers of Star Lager Beer said it will grow volume on some of its major brands by introducing a smaller can packing by introducing a new 35cl can and new 45cl bottles.
Diageo’s Guinness during its investors call noted that it recorded an increase in volume growth from its Can segment. This could be as a result of consumers shifting to smaller and convenient storage packs.
The brewer also announced plans to increase prices to reflect growing cost pressures from excise duties and Value Added Tax (VAT)
Four years ago, 71 per cent of the Nigerian beer industry was dominated by Nigerian Breweries while International breweries managed five per cent. However, by 2018, the market leader had lost 15 per cent of its market share while AB Inbev’s International Brewery increased its footing by 16 per cent.
In its H1 2019 result, NB reported a net drop in profit of 28percent for the first six months of 2019 ending on 30th June. Profits fell to N13.3bn from N18.4bn in the previous year. The drop accelerated in the second quarter with the company recording a 36percent decline in earnings to N5.3bn from N8.2bn.
The decline in profit was blamed on a host of factors including the impact on sales of the second wave of a new excise tax which came into effect on 4th June 2018.
Revenue declined marginally by 1.43percent to N170.1bn from N172.7bn in the same period in 2018.
The Nigerian brewery industry has seen intensified competition in more recent times amid tepid growth on the heels of the country’s sluggish economic recovery and inability to pass the cost to consumers who themselves suffer weak purchasing power.
The stock of Nigerian Breweries was the toast of investors on the floor of the Nigerian Stock Exchange (NSE) on Friday. Investors traded 28.13million units of Nigerian Breweries shares valued at N1.47billion, the biggest volume of trade recorded by the brewer since February 25, 2019, when it traded 42.71million.
The unusual volume of trade had little impact on the performance of NB at the local bourse in Friday’s session. NB shares rose 1.06percent to N52.55 per share, the stock’s highest value in almost two months.
