- Guinness terminates 2016 sales, distribution agreement with Diageo Plc
BY FESTUS OKOROMADU, ABUJA
The Nigerian equities market on Thursday closed positively, with a significant market indicator rising by 87.91 basis points.
The Nigerian Exchange Limited market gauge index, NGX All-Share Index, grew by 0.13 percent closing at 66,570.19 basis points, compared to the previous day’s loss of 0.43 percent, which closed at 66,482.28 basis points. The NGX market capitalization gained N140.77 billion to close at N36.53 trillion while year-to-date return rose to 29.89 percent.
Gains in the share price of ACCESSCORP, WAPCO and UBA which advance 0.31, 0.51 and 0.30 percent respectively contributed to outweigh losses in the share price of FLOURMILL, TRANSCORP, and UCAP which declined by 1.52, 0.33, and 1.16 percent each to keep the market in the green.
Analysis of market activities shows that the total volume of equities traded advanced by 54.27 percent to close at N1.01 billion, valued at N4.73 billion and traded in 6,959 deals. NEIMETH was the most active stock by volume and value, with 657.09 million units traded valued at N985.65 million.
At the close of trading, the market recorded 24 gainers, 19 losers, and 71 unchanged. WEMABANK led the gainers’ chart, while CHAMPION topped the list of losers.
In terms of volume and value contribution, the shares of NEIMETH recorded the highest volume with 64.78 percent while OANDO and UNIVINSURE followed closely behind.
NEIMETH also topped the value chart with a 20.82 percent contribution with OANDO and FIDELITYBK trailing behind it.
Meanwhile, Guinness Nigeria Plc has announced that it will stop the importation and sale of certain Diageo international premium spirit products like Johnnie Walker, Baileys, Singleton and others imported under its 2016 sale and distribution agreement with Diageo Plc.
This disclosure was contained in a notification sent to the Nigerian Exchange Limited by Guinness Nigeria on Thursday where it stated that the decision to no longer trade in the products will wipe off 6% of the total revenue of the Nigerian brewer.
Guinness in its notification said that the move was in line with its long-term growth strategy, and is also in alignment with Diageo Plc’s decision to establish a new, wholly owned spirits-focused business to manage the importation and distribution of its international spirits portfolio in Nigeria as well as West and Central Africa.
It also stated that it would continue to manufacture and distribute its full portfolio of non-alcoholic drinks, beer and locally produced spirits, including Orijin, Captain Morgan Gold, Gordon’s Moringa, and Smirnoff X1 Choco, fully utilising its asset base.
The statement from Guinness partly read, “Guinness Nigeria today announces that, with effect from April 2024, it will no longer import or distribute certain Diageo International premium spirits products, including Johnnie Walker, Singleton, and Baileys and others imported under its 2016 Sales & Distribution Agreement with Diageo Plc.
“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-focused 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.
“In the financial year ended 30 June, 2023, the revenue related to Guinness Nigeria’s portfolio of imported Diageo international premium spirits products was N14 billion, constituting approximately 6 percent of Guinness Nigeria’s total revenues.
“Guinness Nigeria will continue to manufacture and distribute its full portfolio of non-alcoholic drinks, beer, ready-to-drink (RTDs) and locally produced spirits, including inter-alia Orijin, Captain Morgan Gold, Gordon’s Moringa, and Smirnoff X1 Choco, fully utilizing its asset base following the expansion of its production capacity in recent years as a foremost total beverage alcohol player.
“There are no changes to Diageo Plc’s shareholding in Guinness Nigeria, and Diageo remains a key shareholder of Guinness Nigeria.”
Meanwhile, Guinness Nigeria listed the benefits of the new development to include focus on its core business and its strength, reduction in foreign exchange requirements as well as to navigate the negative impact of forex scarcity on its account books among the benefits of the decision, among others.
It stated, “Guinness Nigeria will be better positioned to focus on its core business and its strength in the manufacturing, marketing and distribution of non-alcoholic drinks, beer, RTDs and its locally produced spirits, thus enhancing sustainability, growth, and value creation for all stakeholders of Guinness Nigeria.
“The Change will enable the full utilisation of Guinness Nigeria’s asset base and will accelerate innovation in local spirits products.
“This strategic change reduces the Company’s foreign requirements and mitigates the negative impact of lingering foreign exchange scarcity and financial performance of the Company.”
