"Inflation affecting beer market – Guinness MD"

The Managing Director of Guinness Nigeria Plc, Mr. Seni Adetu, has said that the current inflation rate in the country is impacting negatively on the brewing industry. Adetu, who spoke with our correspondent on Thursday, said the impact from consumers of alcoholic beverages had gone down on the account of this. 

“In the last two to three quarters, the beer market has been on the decline in the face of decreasing discretionary income arising from the impact of inflation and the fuel subsidy removal. People are putting a lot more of their income around housing and feeding,” he said. He also said the industry was battling with finance charges, resulting mostly from lack of infrastructure in the country.

He said, “You need a megawatt of power for every 10,000 of the population; that is the standard everywhere. But if you go by our population, which is about 160 million people, you would expect that we would be doing about 160, 000 megawatts of power but we are doing 4, 000 and when we do that we celebrate. “That is a big issue for us; it affects our operations, making the cost of production high and this affects the business chain too. Many of our retailers, for instance, have to buy generating sets to chill their drinks for sale.” Adetu, however, said that despite the challenges, the industry had remained massive. “Overall, the industry is solid and very competitive and the intensity of competition is getting stronger, which is good as long as there is a level playing ground for the players in the industry,” he said.

Speaking on Guinness’s recent declaration of its dividends, he said the net revenue of the company grew by five per cent, despite a marginal loss. “The board of Guinness Nigeria is delighted with the performance that we have generated for the company even though operating profit dropped marginally last year on the account of increase in the cost of goods, which is related to the inflation of raw materials,” he said.

Report from  (The Punch)