Last October Guinness Nigeria Plc announced it was replacing its then Managing Director Seni Adetu with its new Managing Director, Mr John O’Keefeon the back of dwindling sales and value erosion. The company at the time gave a vague explanation for the removal even though some believed it had everything to do with the spate of poor results. Finally, it appears our suspicions are true. This can be infererred from an article from Bloomberg interviewing the CEO of Diageo Ivan Menezes. Here is an excerpt
Sales of Guinness in Nigeria, Africa’s largest economy, have rebounded after Diageo tried to “premiumize” its operation last year at a time when consumers were seeking cheaper drinks, Menezes said. The ill-timed price increase resulted in a 9 percent drop in Nigerian sales last year, and Diageo has since hired a new management team in response.
“The corrections we made in Nigeria are working well and the last few months we see growing momentum in that business,” he said.
In case you missed it, the sentence “The ill-timed price increase resulted in a 9 percent drop in Nigerian sales last year, and Diageo has since hired a new management team in response.” Proves just that. The management was sacked for “premiumize” Guinness. Guinness problems begun when it decided to turn Guinness Stout into e premium beer by increasing its price. That in hindsight was a bad move.