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just On Call - Diageo targets value beer as Nigeria back on track

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Diageo is to broaden its value beer portfolio in Africa as Nigeria returns to strong growth and the low-price segment increases its market share.  

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The head of Diageo's African operations, Nick Blazquez, told analysts in a call yesterday that recent data has shown Nigeria's value beer segment to have jumped by 30% as consumers become more price-aware. Volumes for Nigerian value brands Dubic lager and Satzenbrau have more than doubled this year.

Meanwhile, in Ghana, Diageo is launching value beer Ruut Extra to take advantage of consumer trends towards the category.

“We'll be increasing our participating in the value segment,” Blazquez said.

In the same call, Andy Fennell, Diageo's president & COO for Africa, told analysts a slowdown in Nigeria looked to be ending ahead of elections in February.

“The market has been up the last couple of periods, with government public spending up,” Fennell said. “I was over there recently and commentators I spoke to were reasonably confident in run-up to the election.”

Fennell and Blazquez said the renewed optimism in the West African country has shown up in high single digit growth for Diageo's Guinness brand, which last year was relaunched in Africa with a new look and fresh marketing push. Continuing problems with Harp lager, however, are set to offpace growth in Guinness and the value brands, Blazquez added.

Other brewers have seen a turnaround in fortunes in Nigeria, with Heineken last week reporting an 11% increase in volumes in the country.

Meanwhile, Blazquez said spirits now account for 25% of Diageo's sales in Africa.

“We will grow our beer business fast and our spirits business even faster,” he said.


Sectors: Beer & cider, Spirits

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