Guinness Nigeria : announces changes to its distribution model for Imported Spirits, mitigating FX risk exposure

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 Sale & 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-focussed 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 spirit products was NGN14billion, constituting approximately 6% 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 utilising 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.

Benefits for Guinness Nigeria

• 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 exchange requirements and mitigates the negative impacts of lingering foreign exchange scarcity and exchange rate volatility on the financial performance of the Company.

John Musunga, Managing Director/CEO, Guinness Nigeria, said: "This change will better position Guinness Nigeria to focus on our core business, which has consistently delivered growth over the years, despite the challenging external environment. The focus on our core strengths will benefit from the investments we have made into expanding capacity at our breweries in Ogba Lagos state and Benin Edo state to meet the growing demand for our beer and highly successful local spirits brands. It will also strengthen our manufacturing, marketing and distribution capabilities and reduce our forex exposure while enhancing sustainable growth and value creation for all stakeholders of Guinness Nigeria."

Guinness remains a strong Nigerian company committed to ensuring that its strategic and operational actions deliver value to our esteemed stakeholders by advancing Guinness Nigeria's performance and sustaining business profitability.

Rotimi OdusolaCompany Secretary
Corporate Relations Director

Notes to Editors

About Guinness Nigeria

Guinness Nigeria, part of the world's largest drinks company, Diageo Plc., is the only Total Beverage Alcohol company in Nigeria with a wide portfolio of brands catering to non-alcohol and alcohol drinkers, with nonalcoholic beverages, Spirits, Lager & Beers. Some of its well-known and well-respected brands include: Guinness Foreign Extra Stout, Guinness Smooth, Malta Guinness, Orijin Bitters, Orijin Zero, Dubic Malt, Mr.Dowells, Gordons Pink Berry, Gordons Orange Sunset, Smirnoff Ice, Smirnoff Vodka, Smirnoff Pine-apple Punch, Captain Morgan Gold, amongst others.

With a very clear ambition - "To be the best performing, most trusted and respected consumer products company in Nigeria", Guinness Nigeria delivers on its sustainability and responsibility commitments which are focused on three areas; Promoting Positive Drinking, Championing Inclusion and Diversity and Pioneering Grain to Glass sustainability. The company continues to be a champion for responsible drinking and community development.

Guinness Nigeria, home of the first Guinness brewery outside of the British Isles, was established in 1950, making it one of the oldest serving manufacturing companies in Nigeria. The first bottle of Guinness Foreign Extra Stout in Nigeria was brewed in our Ogba Brewery in 1962, two years after Nigeria's independence. Three years later, in 1965, Guinness Nigeria was listed on the Nigerian Stock Exchange. In 1974, we built our second brewery in Benin, and expanded it in 1978 to accommodate a second stout brewery. In 1982, we built our fourth Guinness brewery in Ogba, Lagos and expanded both the Benin and Ogba breweries to further increase capacity and meet the growing demand for Guinness Nigeria products in 2011.