Recession Threatens Nigeria’s Beer Market
Can it get any harder for an economy?
Nigeria’s beer making king, Guinness Nigeria is running at a loss.
Apparently, the bottle is making more foes, and the reason is the economic recession biting hard in Nigeria.
Guinness, which up until now recorded huge profits, reported in April that it made a loss of 2.46 billion naira in the nine months to end-March.
That was not entirely surprising. The beer market has shrunk dramatically over the past 2 years as disposable income shrank after the economy slid into recession.
Less people can spare any cash on a bottle of beer.
Guinness Nigeria even admitted that the beer market growth has “slowed over the last two years as a result of the weak economy and declining consumer income with growth now forecast to be running at 5.6% a year as against 7% growth forecast in 2015”.
But that has not stopped the company from dreaming big.
It is now shifting its focus from premium brands to the "lower end" volume market.
The plan is to boost sales and revive profits, the beer brewer said this as it concludes plans to rein in at least 39.7 billion naira from its existing shareholders.
"Given the economic recession in Nigeria ... the company plans to deepen its participation in the value beer segment and increase beer product offerings in the lower end of the market," Guinness said in the share sale prospectus.