Guinness Nigeria Plc said it will continue to import Diageo International Premium Spirits products as the plan to halt the importation of Diago products is taking longer time than expected.
Guinness last year said it reached an agreement with one of its shareholders, Diago, to terminate their 2016 Sale & Distribution Agreement which allows Guinness to import their products into Nigeria.
The brewer is the importer of Johnnie Walker, Singleton, Baileys and others, which is consumed in Nigeria.
Based on the agreement entered last year by the two companies, Guinness will no longer import or distribute certain Diageo international premium spirits products with effect from April 2024.
But, the brewer has admitted that the projected termination date of the sales and distribution agreement is no longer feasible.
“The transition to the new arrangements is taking longer than expected. Hence, the April 2024 completion date is no longer feasible. Accordingly, Guinness Nigeria Plc hereby gives notice of the extension of the separation of the imported International Premium Spirit (IPS) brands from Guinness Nigeria Plc’s business to now become effective during the course of Guinness Nigeria Plc’s Financial Year 2025,” Guinness admitted.
Diago Plc products distributed by Guinness constitute N14bn which is about 6 per cent of the company’s revenue as of 2022.
Guinness said terminating the deal was necessary as the “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.”
The development does not change Diageo PLC’s shareholding in Guinness Nigeria, and Diageo remains a key shareholder of Guinness Nigeria, the company maintained.
Guinness also noted that both parties have taken preliminary steps towards the implementation of the business separation