In an effort to counteract the repercussions of a fluctuating currency, Guinness Nigeria Plc, part of drinks company Diageo Plc DEO, announced plans to curtail imports of certain spirits, including the renowned Johnnie Walker whiskey, starting April 2024.
This decision falls in line with Diageo's broader strategy to establish a fresh venture responsible for supervising the import and distribution of spirits across West and Central Africa.
In FY23, the revenue related to Guinness Nigeria's portfolio of imported Diageo international premium spirit products was NGN14 billion, making up 6% of its total revenues.
However, Guinness Nigeria will continue manufacturing and distributing its full portfolio of non-alcoholic drinks, beer, ready-to-drink (RTDs) and locally produced spirits.
Through the decision, Guinness Nigeria expects to be better positioned to focus on its core business, fully utilize its asset base, reduce foreign exchange requirements, and mitigate the negative impacts of lingering foreign exchange scarcity and exchange rate volatility on financial performance.
Diageo's strategic shift underscores the adaptive measures companies are employing in response to the economic reforms introduced by the Nigerian government, reported Bloomberg.
The naira, Nigeria's official currency, has witnessed a drastic devaluation this year, dropping approximately 40% against the dollar.
Meanwhile, there are no changes to Diageo's shareholding in Guinness Nigeria, and Diageo remains a key shareholder.
Price Action: DEO shares are trading higher by 0.31% at $150.82 on the last check Friday.
Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.
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