Nigerian Breweries Plc said it plans to raise prices on its products to boost revenue and profit as the impact of the new excise duty rate increase hit earnings.
While speaking at the company’s Pre-Annual General Meeting (AGM) on Tuesday, the Managing Director of Nigerian Breweries Plc, Jordi Borrut Bel, said that with the second wave of excise duty rate increase set to come into effect in June 2019, the company needs to increase prices to offset inflationary pressure and the impact the excise duty rate increase would have on the bottom line.
However, he assured stakeholders that the increase won’t be across board, noting that there would always be affordable products in its stable to cater to the needs of every consumer despite the impending price increase.
Borrut Bel said that the company experienced both revenue and profit decline in 2018 due to the impact of the excise duty rate increase, stressing that the company did not transfer the cost to consumers.
“In 2018 it was difficult to pass on the extra cost to consumers in view of the weak purchasing power, we actually tried it in June last year, but after closely watching the reaction of consumers, we quickly reverted back to the old prices in July, but seeing the Q1 2019 results, our volume sales increased, which means we have the consumer confidence.
“Last year, in our bid to drive efficiency, we went through a painful period trying to cut cost, we are also aware of the plight of consumers, we are also aware that our market has become even more competitive, but our saving grace is we have a very wide range of products, so we will look to capitalise on the quality of our products, “he said.
In 2018 full year, Nigerian Breweries sales declined by 5.8% to ₦324bn, while net profit fell by 41.2% to ₦19.4bn. And in the first quarter of 2019, net profit fell by 21.3% to ₦8bn from ₦10.2bn despite a 3.3% sales increase.