Guinness Nigeria Plc has announced the extension of the importation of spirits to 2025.
The brewer disclosed this in a corporate notice filed with the Nigerian Exchange Limited on Tuesday.
It said that the plan to stop the importation of premium spirits like Johnnie Walker, Singleton, Baileys, and others under its 2016 sale & distribution agreement with Diageo in April was no longer feasible, necessitating the extension.
In October, Guinness Nigeria announced the discontinuation of the importation of spirits from the multinational alcoholic beverage company, Diageo, to reduce its foreign exchange needs.
Diageo planned to set up a Nigerian arm in 2024 due to Guinness Nigeria’s planned discontinuation of the importation of its spirits.
Guinness Nigeria, which is a subsidiary of Diageo, incurred N49bn in exchange rate losses in its 2023 half-year operations and blamed the lack of access to forex for its operations in August, despite the harmonisation of the segments of the currency market by the Central Bank of Nigeria in June.
However, in its latest update to the exchange, it said that the process of separating the businesses was taking longer than usual.
The notice signed by the company’s Legal Director/Company Secretary, Abidemi Ademola, partly read, “Guinness Nigeria Plc and Diageo have, since the said announcement, taken preliminary steps towards the implementation of the business separation, which was initially scheduled to be completed by April 2024.
“However, 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.
“This update is to advise that Guinness Nigeria Plc will continue to import and distribute Diageo International Premium Spirits products, including Johnnie Walker, Singleton, Baileys and others, which are imported under its 2016 Sale & Distribution Agreement with Diageo Plc until the transition process is completed.”
The brewer maintained that the planned separation was in line with its long-term growth strategy, and Diageo Plc’s decision to establish a new, wholly owned spirits-focused business to manage the importation and distribution of its international premium spirits portfolio in West and Central Africa, with Nigeria serving as a key hub of that business.
Foreign exchange expenses eroded the operating profit of Guinness Nigeria Plc for the year ended December 2023, resulting in a N5.23bn loss, according to its unaudited interim financial statements.