By Emmanuel Nduka
Like P&G, GlaxoSmithKline and Microsoft, Guiness has announced plans to exit the Nigerian market, citing the harsh economic climate which it says is making business unprofitable.
The stout company now joins a long list of multinationals that are pulling out over worsening inflation occasioned by the economic policies of President Bola Tinubu.
After enduring a torrid 75 years of economic challenges, Guinness has announced that it will sell off its controlling shares to Singaporean conglomerate Tolaram Group.
Heritage Times HT reports that the brewery brand recorded a staggering N61.9 billion loss after tax between July 2023 and March 2024, just a few months after Mr Tinubu floated the naira in an effort to unify the currency’s value on the official and parallel foreign exchange markets.
But the move backfired and caused many multinational companies to suffer huge financial setbacks including Guinness Nigeria whose N61.7 billion loss after tax in Q3 was a 1000 per cent increase from the N5.9 billion revenue generated in the same period last year.
The loss exacerbated by the naira’s continued downward trend may have informed Diageo, Guinness’ parent company, to sell its 58.02 per cent majority stake to the Singaporean group.
“Under the terms of an agreement signed today, 11 June 2024, Tolaram will acquire Diageo’s 58.02% shareholding in Guinness Nigeria royalty agreements for the continued production of the Guinness brand and its locally manufactured Diageo ready-to-drink and mainstream spirits brands,” the company said in a statement Tuesday.
Guinness Nigeria Plc, a public limited liability company quoted on the Nigerian Stock Exchange, was incorporated on April 29, 1950, as a trading company importing Guinness Stout from Dublin.
The Guinness brand has operated in Nigeria since 1950, but with Tolaram’s controlling stake acquisition expected to conclude by 2025, the global brewery brand will have spent 75 years in Nigeria.
In the statement, Guinness said the firm would leave Nigeria next year and hand over to a third-party venture.
“The transaction is expected to be completed during fiscal 2025, subject to obtaining the requisite regulatory approvals in Nigeria,” said the statement signed by Abidemi Ademola, Guinness’s legal director.
Diageo, however, stated that the sale of its Nigerian brand would not in any way affect its ownership of the Guinness global brand, adding that it “will retain ownership of the Guinness brand, which will be licensed to Guinness Nigeria for the long term”.
Already, some of Diageo’s popular brands in Nigeria include Smirnoff Ice, Smirnoff Vodka, Orijin Bitters, Malta Guinness, Gordons Orange Sunset, and Dubic Malt.
