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Contrary to multiple claims, Guinness isn’t leaving Nigeria

Saheed Ibrahim

Claim: Multiple reports claim that Guinness is leaving Nigeria due to the country’s economic havoc.

Contrary to multiple claims, Guinness isn't leaving Nigeria

Verdict: False! The manufacturing company is not leaving the country. Tolaram Group only bought 58.02% of Diageo’s shares in the business.

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Guinness Nigeria Plc is the foremost total beverage alcohol company in Nigeria and a subsidiary of Diageo Plc. in the United Kingdom. The company was incorporated in Nigeria in 1963. Diageo Plc produces alcoholic and non-alcoholic drinks such as Harp, Guinness, Johnnie Walker, Baileys, Smirnoff, Gordon’s Dry Gin, Satzenbrau, Dubic Malt, Malta Guinness, Orijin Non-alcoholic Zero, Orijin, and MrDowell’s.

On June 11, the Internet was awash with reports that Guinness was leaving Nigeria. Several blogs and social media accounts cited the Peoples Gazette report, which headlined, “Guinness to leave Nigeria after 75 years as Tinubu’s inflation wreaks economic havoc.”  

The news channel also claimed that “Guinness will join a long list of multinationals, like GlaxoSmithKline and Microsoft, that have left Nigeria, citing the harsh economic climate as making business unprofitable.”

The report reads: “After operating in Nigeria since 1950 and enduring a torrid economic climate on the back of President Bola Tinubu’s administration, Guinness has announced it will exit the Nigerian market and sell off its controlling shares to Singaporean conglomerate Tolaram Group on Tuesday.”

Peoples Gazette Nigeria added that the brand’s loss between 2023 and 2024 may have forced Guinness’ parent company, Diageo, to sell its 58.02 per cent to a Singaporean group, Tolaram.

Peoples Gazette reports that: “The brewery brand recorded a staggering N61.9 billion loss after tax between July 2023 and March 2024, just a few months after Mr Tinubu floated the naira to unify the currency’s value on the official and parallel foreign exchange markets.

“But the move backfired and caused many multinational companies to suffer huge financial setbacks, including Guinness Nigeria, whose N61.7 billion loss after tax in Q3 was a 1,000 per cent decrease from the N5.9 billion profit generated in the same period last year.

“The loss exacerbated by the naira’s continued downward trend may have informed Diageo, Guinness’ parent company, to sell its 58.02 per cent majority stake to the Singaporean group.”

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Peoples Gazette claimed that Guinness said the firm would leave Nigeria next year and hand over to a third-party venture.

Several blogs and social media accounts, such as Gossipmilltv, Linda Ikeji Blog, and Nairaland, have similar narratives. Others can be found here, here, and here. The news that Guinness was leaving Nigeria has also been circulated on WhatsApp.

Verification

DUBAWA visited Guinness Nigeria’s website and retrieved a press release dated June 11, 2024, with the headline “Tolaram to acquire Diageo’s shareholding in Guinness Nigeria PLC.”

The statement did not indicate that Guinness is leaving Nigeria. Still, it stated that Tolaram was set to acquire 58.02% of Dieageo’s shareholding in Guinness, Nigeria, to continue producing the brand and its locally manufactured Diageo ready-to-drink and mainstream spirits brands.

The statement reads in part: “Under the terms of an agreement signed today, 11 June 2024, Tolaram will acquire Diageo’s 58.02% shareholding in Guinness Nigeria and enter into long-term license and royalty agreements for the continued production of the Guinness brand and its locally manufactured Diageo ready-to-drink and mainstream spirits brands. 

“The transaction is expected to be completed during Fiscal 2025, subject to obtaining the requisite regulatory approvals in Nigeria.

“Diageo remains deeply committed to Nigeria and will retain ownership of the Guinness brand, which will be licensed to Guinness Nigeria for the long-term, enabling the next phase of growth and development of Guinness Nigeria under the stewardship of Tolaram.

“In partnership with Guinness Nigeria and Tolaram, Diageo will continue to drive the brand and marketing strategy for Guinness in Nigeria to ensure Diageo’s exceptional capabilities in brand building and innovation continue to drive long-term growth for Guinness in Nigeria.

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In a statement through Bayo Onanuga, President Bola Tinubu’s Special Adviser on Information and Strategy, the President praised the Tolaram Group for its confidence in Nigeria’s economy and assured that his government is committed to creating a conducive and transparent operating environment. 

The statement states, “Tolaram will also enter into long-term license and royalty agreements for the continued production of the Guinness products and its locally manufactured Diageo ready-to-drink and mainstream brands.”

The statements from Guinness Nigeria and Bayo Onanuga confirmed that Guinness is not leaving the country, but Tolaram Group only bought 58.02% of Diageo’s shares in the business.

Against the claim that the company is leaving Nigeria due to the harsh economic environment, its website’s April 25 press release shows that its revenue surged by 28% in its unaudited financial results for the nine months ending March 31, 2024.

The statement states, “In a year marked by unprecedented challenges, Guinness Nigeria delivered a commendable 28% year-on-year revenue growth, reaching ₦220.3 billion compared to ₦172.47 billion in the same period last year. This notable surge was particularly pronounced in Q3, with a remarkable 44% acceleration, signifying a strategic pivot amidst evolving market dynamics.

“Despite grappling with soaring inflation rates, currency devaluation, and escalating food insecurity, Guinness Nigeria demonstrated remarkable resilience, leveraging proactive pricing strategies and optimised product offerings, focusing on premium categories to sustain growth momentum.”

Conclusion

The claim that Guinness is leaving Nigeria due to a harsh economy is false. Tolaram Group only bought 58.02% of Diageo’s shares in Guinness Nigeria.

This report is produced for the DUBAWA 2024 Kwame Karikari Fact-Checking Fellowship in partnership with The Hope Newspaper to facilitate the ethos of truth in journalism and enhance media literacy in Nigeria.

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