Nigerian Breweries (NB PLC) has announced that it will be increasing the prices of all its products starting from August 10, 2023. The decision comes as a response to the continuous rise in input costs and the need to mitigate its impact on the company.
The brewing industry, like many other sectors in Nigeria, has been facing significant challenges due to the country’s economic conditions. Inflation has reached 22.79%, and the managed float of the forex market has led to a devalued currency, causing companies like NB PLC to incur forex losses.
The rising production costs and increased cost of raw materials have further added to the financial strain faced by the brewing giant. In their half-year financial results, NB PLC reported N70.6 billion in forex losses as of June 30, 2023.
The decision by Nigerian Breweries to increase prices may set a precedent for other players in the industry to make similar adjustments. Competitors facing similar cost pressures may also consider raising their prices, given the demand-supply dynamics in the beverage market.
For consumers, this price increase means that they will have to pay more for their favorite beverages. With the challenging economic conditions and stretched disposable incomes, consumers may be forced to cut back on their beer consumption or seek more affordable alternatives.
The price hike could also impact brand loyalty within the industry, as consumers may explore other options in response to the increased costs.
Additionally, insider sources reveal that Nigerian Breweries has seen around 540 employees leave the company between January and July of this year for various reasons, including voluntary early retirement, redundancy, and migration to other countries (“Japa syndrome”).
As the price increase takes effect, effective communication from Nigerian Breweries will be essential in fostering understanding among consumers. The beverage industry as a whole will be closely watching how the market reacts to this move, and competitors may adjust their pricing strategies accordingly.
In the midst of these challenging times, consumers may need to adjust their budgets for beverages and prepare for a more expensive beer-purchasing experience.
