Nigeria, just likemost alcohol drinking countries around the world, is in the middle of a brutalbeer war that has seen competing beer makers suffer declining bottom lines inexchange for higher market share.
Comparative data fromthe financial statements of three of the largest beer makers in the country, InternationalBreweries (owned by AB InBev), Guinness Nigeria (owned by Diageo) and NigeriaBreweries (partly owned by Heineken), suggest that Guinness Nigeria Plc haslost its place as the second-largest brewery by revenues to InternationalBreweries.
As at the half-yearended December 2018, Guinness Nigeria reported revenues of about N67.79billion, compared to N70.5 billion in the same period a year earlier.International Breweries, on the other hand, reported half-year revenues for theperiod ended June 2019 of N68.6 billion, slightly overtaking its rival.
It is important tonote that Guinness reports its full-year results ended June 30th every year,while International breweries adopt a full year-end date of December 31st everyyear.
On a quarter onquarter basis, things also looked quite tight. In the quarter ended March 2019,Guinness reported revenues of N33.6 billion compared to InternationalBreweries’ revenues of N33.5 billion.
In the quarter endedSeptember 2018, Guinness posted revenues of N28 billion compared toInternational Breweries N30.2 billion.
Also, in the quarterended December 31, 2018, Guinness and International Breweries reported revenuesof N39.7billion and N32.7 billion respectively. Guinness is yet to release itsJune 30th, 2019, audited results.
Nigeria Breweriesstill leads both companies, with half-year (January to June 2019) revenues ofN170.1 billion.
This is a grand shiftin the Nigerian beer market, which has been dominated by Nigeria Breweries andGuinness for decades.
As competitionbecomes stiffer, Guinness has lost market share over the last 5 years,especially as younger alcohol drinkers’ shift towards spirits and cheaperquality beers.
InternationalBreweries saw the opening and quickly flooded the market with cheap beers suchas Hero, Trophy, Castle, Eagle Stout and more recently, Budweiser.
Suffice to add thatInternational Breweries also has the strong backing of one of the largestbreweries in the world, AB InBev, and is leveraging on its distribution valuechain and brand equity.