It was 6:30pm, the day’s work was done and Emeka decided it was time to visit his favorite spot for a cold bottle of beer, he likes Heineken lager beer. Before he left the office, he had called his usual cohort of friends to join him at this famous spot around Surulere. Where they enjoyed cold beer accompanied with ‘point and kill’, spiced catfish pepper soup.
When the table was set in the open, with music blaring at the background, Emeka and his friends settled down to unwind for the day. He called out to the waitress to place his order. Upon arrival at their table, each occupant of the table placed their order, Goldberg, Harp ’33’, and Heineken lager beers. But at this point, the waitress interrupted the usual ritual of simply taking the orders and returning minutes later with what was requested for. She announced that Goldberg which used go for 200 Naira retail price was now 250 Naira, Harp moved from 200 Naira to 250 Naira and Heineken rose from 300 Naira to 350 Naira per bottle. This represents a 25 percent increase in retail price.
Emeka was the first to react, “please, I do not understand what you mean, when did this price increase take place. Just yesterday, I was here to drink my beer and in less than 24 hours you have increased the prices” he queried.
The waitress retorted apologetically “oga, we are sorry about this price increase, but believe me it is not our fault, when we went to buy drinks today; we had to pay more for the same quantity of beer” she said.
Visits to local pubs around Apapa, FESTAC, Surulere, Maza-maza and Kirikiri show that this increase in price is wide spread and consumers of lager beer are cutting down on consumption. Pub owners lament poor patronage and a significant reduction in the volume consumed per customer “It is really difficult to understand where this country is going to. The number of people that used to come here in the evenings has dropped greatly and those who come either cut down on the volume of beer they used to consume, say, from two to one or from four to two or they switched to cheaper or less priced brands” Onome Okon, a pub operator at FESTAC, Amuwo Odofin said.
Whilst pub operators lament poor patronage, consumers talk of rising costs of essential commodities, diminishing disposable income and unemployment. These consumer concerns are captured aptly by Kayode Ogunlana.
“It is a joke, are you aware that 250 Naira is already the price of a plate of food. Rather than drink a bottle of beer, I would rather use it to pay for a plate of food. I know not everyone shares my sentiments and this is understandable. There are people who would drink their beer whatever happens to scale of preference. I am reprioritising” said Kayode.
Efforts to reach both the Nigerian Breweries Plc and Guinness Nigeria for comments were unsuccessful.
Over the last five years, the sector has attracted huge foreign investments through international alliances. For example, Heineken acquired 54 percent shares of NB and subsequently invested more than $500 million (about ₦77.5 billion) in the company. In response, Guinness Nigeria, the local unit of Diageo Plc, announced plans to spend ₦52 billion ($335.8 million) on expanding its brewing capacity in Benin and Lagos breweries. It was therefore no surprise that the Nigerian market for Guinness Stout overtook Ireland, the home country of Guinness, to become the company’s largest market after the United Kingdom.
A report published by Euromonitor, a market’s intelligence firm showed that traditionally the largest beer category in Nigeria, mid-priced lager, continued to perform poorly in 2015 as it did for much of the review period, declining by 9 percent in total volume over the course of the year. It was thereby overtaken in size by economy lager for the first time, which now comprises 32 percent of total volume sales of beer and 49 percent of total volume of lager. Total volume sales of mid-priced lager declined in 2015 largely due to reduced consumer spending power as a result of the poor GDP growth seen in Nigeria, which was the result of the decline seen in the global price of crude oil, a major generator of revenues for Nigeria.
