Nigerian Breweries Denies Plan to Hike Price
Nigerian Breweries Plc (NB) has denied the alleged plan to raise beer prices after the company announced a significant earnings loss in the first half of 2023. Media outlets reported early today that the local breweries giant has announced a plan to increase the price of all their products effective August 10, 2023.
Citing a letter dated August 1, 2023, Nairametrics said the company established the need to review prices due to the soaring rise in input costs and the necessity to cushion its impact.
“This is to inform you that we will review the prices of some of our stock keeping units (SKUs) effective Thursday 10th August 2023”, the letter reads. It is reported that the decision to increase prices is attributed to several factors that have bedeviled the Fast-Moving Consumer Goods (FMCG) industry.
In a chat, Nigerian Breweries Plc’s Corporate Affairs Director, Sade Morgan told Daily Global News that the company has no plan to hike prices.
“Yes, we will be reviewing prices to some SKUs to further mitigate losses, hence the notification sent to distributors. Definitely not a price hike”, she said. She explained that the letter in question is addressed to Nigerian Breweries customers and it is only advance notice to distributors which is a standard practice across the country.
Morgan believes the advisory seems to have been mischievously placed on social media. Analysts however agreed to the reason for activating survival mode after record breaking loss in the first half of 2023.
“There is a need for companies to activate survival strategy amidst growing economic pressures, saying that price hikes on producers goods are inevitable in the short term”, Market Research analysts at LSintelligence Associates said in an email response.
In the first half of 2023, NB Plc reported a loss after tax of N67.84 billion compared with N25.7 billion profit the brewer declared in the corresponding period.
In the first six months, the company’s unaudited report showed that revenue jumped by 1.2% to N277.42 billion from N274.09 billion in the comparable period. However, on a quarterly comparison, its revenue grew by 25% in Q2-2023 to N154.11 billion from N123.31 billion recorded in the first quarter of 2023.
Raising concern about its earning outlook, Nigerian Breweries Plc saw a spike in net loss on foreign exchange transactions, up by 1071% to N85.26 billion in the first half of 2023 from N7.28 billion in H1:2022
