Guinness Nigeria To Export Beer To South Africa To Increase Sales

Guinness Nigeria Plc plans to increase exports to improve sales and generate more foreign exchange as the country’s second-largest brewer battles to overcome an economic slump in its home market.

The unit of London-based Diageo Plc will consider selling Guinness stout and the herbal drink Orijin in South Africa to boost the proportion of beverages it sends to international markets, Chief Executive Officer, Peter Ndegwa, said in an interview with Bloomberg.

That will help resolve the brewer’s shortage of foreign currency in Nigeria, which the beverage maker needs to pay for imported goods.

“With all the challenges we have had with foreign currency availability, we realise that export is a great opportunity to gain foreign exchange and stabilise,” Ndegwa said.

“We have heard a lot of inquiries from South Africa. We are currently in the process of seeing how we can export some of those brands to the country.”

Heineken NV is also expanding in South Africa with the recent introduction of Sol Mexican lager, part of a plan to boost its market share in a country dominated by SABMiller Plc. Guinness Nigeria will also seek to export beer to target Africans living on other continents, Ndegwa said.

Generating foreign currency from exports would help Guinness Nigeria offset a scarcity of dollars in its home market caused partly by a slump in oil revenue, the country’s biggest earner.

The economy is on track to shrink 1.8 per cent this year, according to the International Monetary Fund. That would be Nigeria’s first full-year contraction since 1991, according to data from the nation’s statistics agency.

Guinness Nigeria is seeing drinkers switch to cheaper beer brands such as Satzenbrau as disposable incomes decline, and is expanding its range of spirits to increase choice in its more affordable product range.

“We are focused on brands that are lower priced, by either improving distribution or improving awareness,” Ndegwa said. “We have spirit brands across all categories but the growth is mid-to-lower end.”