• Thursday, December 07, 2023
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Guinness stops importation of premium spirits to reduce FX exposure

Guinness stops importation of premium spirits to reduce FX exposure

Guinness Nigeria Plc, one of Nigeria’s leading beverage makers, plans to stop the importation and distribution of certain Diageo international premium spirits effective from April 2024, the company said in a statement.

The premium spirits include; Johnnie Walker, Singleton, Baileys, and others imported under its 2016 sale & distribution agreement with Diageo.

The move is in line with Guinness Nigeria’s long-term growth strategy and aligns with Diageo Plc’s decision to establish a new, wholly owned spirits-focused business to manage the importation and distribution of its premium spirits portfolio in West and Central Africa, with Nigeria as one of the hubs.

Also, the strategic change will help reduce the company’s foreign exchange requirements and mitigate the negative impacts of lingering foreign exchange scarcity and exchange rate volatility on its financial performance.

“This change will better position Guinness Nigeria to focus on our core business, which has consistently delivered growth over the years, despite the challenging external environment,” said John Musunga, managing director and CEO of Guinness Nigeria.

“The focus on our core strengths will benefit from the investments we have made into expanding capacity at our breweries in Ogba Lagos state and Benin Edo state to meet the growing demand for our beer and highly successful local spirits brands,” he said.

He noted that the move will strengthen his organisation’s manufacturing, marketing, and distribution capabilities and reduce its forex exposure.

He added that it will help enhance the organisation’s sustainable growth and value creation for all stakeholders.

For the financial year ended 30 June 2023, Guinness’s portfolio of imported Diageo spirits products was N14 billion, accounting for six percent of its total revenue.

The company said it will continue to manufacture and distribute its full portfolio of non-alcoholic drinks, beer, ready-to-drink (RTDs), and locally produced spirits.

It added that it will fully utilise its asset base following the expansion of its production capacity in recent years as a foremost total beverage alcohol player.

Guinness stated that despite the move there are no changes in Diageo Plc’s shareholding in Guinness Nigeria and that Diageo remains a key shareholder.