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Nigerian Breweries : Consumers no longer able to afford beer

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Nigerian Breweries has vowed to remain consumer focused despite the economic headwinds which saw the brewery giant recording some upsets in its financials in the year end results.

Speaking during NB’s 2023 pre 78th AGM media briefing in Lagos, Mr. Hans Essaadi,  the company’s Managing Director/ CEO disclosed that the company recorded a net loss of approximately N106 billion in its 2023 full year results.

 

The loss follows a combination of challenging economic factors ranging from heightened operational costs, continued pressure on consumer disposable income, escalating inflation rates, FX volatility, and high cost of debts, amongst others.

 

He explained that the industry was initially confronted with a massive increase in excise duty rates and introduction of other taxes on alcoholic beverages and single use plastics.

 

“Following appeals and representations by the industry, the government suspended the implementation of the new rates and taxes. Nevertheless, the brewed product market was severely impacted by the economic realities of 2023 which included huge input and operating costs and consumers’ weak purchasing power,” regretted Mr. Essaad.

 

According to him, the market suffered a volume decline and the erosion of profitability leading to unprecedented combined pre-tax loss of N266 billion amongst the main players adding that, “the revaluation of outstanding foreign debts and payables to overseas partners due to the devaluation of Naira was the main reason for the huge loss recorded.

 

Essaadi regretted that despite the company’s best efforts and diligent management which ensured that it ended the year with an operating profit of N45 billion, the Brewery still ended with a net loss.

 

Based on this, he said the board was unable to propose any dividend payment for the 2023 financial year breaking the age-long tradition of consistent dividend payment.

 

Echoing similar sentiments, the Company’s Marketing Director, Emmanuel Oriakhi said the final part of the transaction for the completion of the 80 per cent acquisition of Distell Wines and Spirit Nigeria Limited will be completed in the first half of the year which will be between April and June this year.

 

He explained that following the shareholders’ approval at the extra-ordinary general meeting in December last year, the company has subsequently executed the transaction documents with Heineken Beverages[Holdings] Limited of South Africa for the acquisition of an 80% equity stake in Distell Wines and Spirits Nigeria and the acquisition of 100% of Heineken Beverages’ import business in Nigeria.

 

“This is a strategic acquisition that is in furtherance of our beyond beer agenda and which would provide us with a complimentary multi-category portfolio and strengthen our market share in the wider beverages market,” he said.

 

Credit: thenationonlineng.net

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