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BUSINESS STRATEGY
Diageo sells its shareholding in Guinness Nigeria to Toleram group
By our African Marketing Confederation News Team | 2024
Diageo aims to create a new model for Guinness by partnering with specialist manufacturing, marketing and distribution conglomerate.
Diageo, the multinational drinks company, is selling its shareholding in Guinness Nigeria to Toleram, a Singapore-based group that has extensive business interests in the country.
At the same time, Diageo will still retain ownership of Guinness Nigeria, but with Toleram in place as a long-term partner in the business. Toleram will thus have day-to-day control over much of the business and its future growth strategy.
Photo: Guinness Nigeria
“Diageo is creating a new model for Guinness and its locally manufactured ready-to-drink (RTD) and mainstream spirits (MSS) products in Nigeria, partnering with specialist manufacturing, marketing and distribution conglomerate Tolaram,” Diageo says in a press release.
“With a five-decade presence in Africa, Tolaram is one of the largest consumer packaged goods companies on the continent and has forged joint venture partnerships with several leading consumer multinational companies.
“The transaction announced today and the new long-term partnership model serve to provide a robust platform for Guinness’ continued expansion in Nigeria, supporting investment in both manufacturing and distribution capabilities, and driving greater efficiency and growth.”
The press release continues: “This transaction is consistent with Diageo’s strategy to operate a flexible and asset-light beer operating model, one which allows it to select the most appropriate structure and route to market for Guinness based on local conditions, while retaining ownership of the iconic Guinness brand.”
Diageo will continue to drive the brand and marketing strategy
Under the terms of the agreement, Diageo will continue to drive the brand and marketing strategy of Guinness in Nigeria, in partnership with Guinness Nigeria and Tolaram. According to the company, this will “ensure Diageo’s exceptional capabilities in brand building and innovation continue to drive long-term growth for Guinness in the country”.
Says Haresh Aswani, Managing Director of Tolaram Africa: “The acquisition of Guinness Nigeria marks a pivotal moment in Tolaram’s journey of growth and diversification. We are thrilled to welcome a company with such a rich legacy and strong consumer loyalty into our ecosystem.
“This strategic move not only expands our footprint in the Nigerian market but also presents an opportunity to leverage our combined strengths to foster innovation and deliver immense value to our customers and stakeholders across the nation”.
In Nigeria, Toleram’s consumer business operates under joint ventures with leading consumer multinational companies such as Indofood, Kellanova (formerly known as Kellogg Company), Dano and Colgate-Palmolive.
Tolaram has a significant presence in Nigeria, with over 15,000 employees and combined investments of more than US$1-billion.
Comments the London-based Financial Times newspaper: “[Toleram] is one of a growing number of largely non-western groups taking advantage of the retreat of their western competitors.
“Others, including Singapore-listed Olam and Turkey’s Hayat Kimya, continue to invest in Nigeria. Analysts say they provide the Nigerian market with cheaper alternatives and often have a higher risk appetite.”
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