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Nigerians still love beer despite economy downturn

Tyrion Lannister, one of the lead characters in G. R. R Martin’s Novel, The Game of Throne, said “l am a person who drinks. People who drink need to keep drinking. It is not easy being drunk all the time. If it were easy, everyone would do it.

The Imp added that “Everything’s better with some wine in the belly. I can’t sleep without wine,”

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If Tryrion were to be reborn into the World again, he would love to be a Nigerian.

Nigerians love beer. They consume it and every tribe or ethnic group has a name for it. Even foreigners know we are addicted to rum in the bottle, and we are ready to spend our hard-earned cash on it no matter the economic situation.

On a cool Saturday evening, Anthony Rapuluchukwu, a 42-year-old businessman, was holding a glass full of beer in his right hand, getting ready to take a sip of life.

He said he had already drunk four bottles of Trophy, and he hadn’t even started as that number was just an appetizer.

“Every day, I drink beer. I have been drinking since l was 18. We like beer in this country and l think it is hereditary as my parents do drink, even my grandparents tasted it and l am sure those before them had,” said Rapuluchukwu.

Read also: Lagos to close Nigerian Breweries’ Rail Crossing, other for rail project 

Rapuluchuku is absolutely correct because statistics validates his point.

Nigerian Breweries, the largest brewer in Africa’s largest economy, recorded sales of almost N259.92 billion as at nine months September 2019 while Guinness Nigeria and International Breweries recorded sales of N26.89 billion and N26.89 billion respectively.

That means these companies generated cumulative revenue of N383.98 billion, which is more than the combined internally revenue of 20 states.

If we divided the total revenue figure (N383.98 billion) by a population of 170 million, it then means that one Nigerian will get a bottle and a halt each.

According to a recent report by a market research group, the country has an average beer consumption of 12.28 litres per year, which means it leads the top 10 biggest beer-drinking countries in Africa.

“This is by virtue of her population, which technically translates to higher volume and litres consumed per year,” said the report.

The report also revealed that beer makes up just 16 percent of alcohol consumption in Nigeria, while other drinks make up 84 percent due to the high popularity of home-brewed beverages in the country.

According to a 2016 report by the National Bureau of Statistics (NBS), Nigerians spent at least N208 billion on alcohol – this amount was more than the budget of Ondo State for that year.

A breakdown of the nation’s sobriety pattern shows the South-south zone is the least restrained community of alcohol consumers. There, N74.4 billion was spent on alcohol, making the states of Delta, Edo, Bayelsa, Rivers, Akwa Ibom, and Cross Rivers the section of the country inhabiting the most enthusiastic drinkers in the year.

However, the largest brewers are struggling as a stuttering economy has hindered consumers from drinking more beer while some of them have downgraded to cheaper brands.

While the country’s gross domestic product ( GDP) stood at 2.28 as at the third quarter of 2019, it is lower than the 6.31 percent growth of 2014.

Inflation for the month of December 2019 stood at 11.98 percent, the highest in 17 months as food prices have skyrocketed on the back of closure of the borders by Federal Government.

Analysts are of the view that that 2020 will remain tough for Nigeria from a macroeconomic standpoint, and even more so for consumers.

Upward adjustments on electricity tariffs next year, Increase in VAT, and the land border closures, will further squeeze consumer wallets.

Despite the harsh and unpredictable environment, brewers are sanguine that the economy will rebound to growth as they are intensifying strategy to take advantage of the Nigeria market.

International Breweries plans to raise capital via a rights issue so as to reduce the huge debt in its books. The company has been recording losses since 2018.

“Additionally, higher energy costs are likely to weigh on COGS, and with brewers still unable to fully transfer the cost burden to consumers, we expect some contractionary margin pressures,” said analysts at Cordros Capital Ltd.

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