GUINNESS Nigeria Plc has announced plans to stop the sales and distribution of Johnnie Walker, Singleton, Baileys and other imported brands, citing Nigeria’s currency problems.
The company disclosed this in a statement on Thursday, October 5, signed by its Corporate Relations Director, Rotimi Odusola.
It said the strategic change resulted from its decision to mitigate the negative impacts of lingering foreign exchange (FX) scarcity in the country.
“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,” it stated.
Findings by The ICIR showed that Guinness Nigeria suffered a massive loss in foreign exchange by 20,601 per cent to N45.95 billion in June 2023, compared to N221.98 million in June 2022.
The losses were reported in the company’s financial statements for the year ended June 30, 2023.
In 2016, Guinness Nigeria entered into a Sale and Distribution Agreement with Diageo Plc for its international premium spirits (IPS) brands in Nigeria.
In the ‘notification of a change in distribution model’ to the investing Public on Thursday, Guinness Nigeria said it would stop the IPS brand distribution effective April 2024.
“Guinness Nigeria 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,” the company stated.
Guinness Nigeria manufactures, markets, and distributes non-alcoholic drinks, beer, ready-to-drink (RTDs) and its locally produced spirits, including inter-alia Orijin, Captain Morgan Gold, Gordon’s Moringa, and Smirnoff X1 Choco.
In the financial statement, the revenue related to Guinness Nigeria’s portfolio of imported Diageo IPS products was N14 billion, constituting approximately six per cent of Guinness Nigeria’s total revenues.
“There are no changes to Diageo plc’s shareholding in Guinness Nigeria, and Diageo remains a key shareholder of Guinness Nigeria,” it stated.
“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,” the company said.
In December 2015, Guinness Nigeria acquired the distribution rights of Diageo Plc’s IPS brands in Nigeria.
The acquisition was worth N2.35 billion and is expected to deepen the company’s operations and grow its balance sheet in 2016 and beyond.
Under the deal, Guinness Nigeria was to take over various Diageo assets, including Diageo Brands Nigeria Limited, the wholly-owned business that marketed and distributed the IPS brands in Nigeria.