NIGERIA – International Breweries Plc (IB Plc), a subsidiary of ABInBev, has announced an increase in the prices of its beer and other stock-keeping units (SKUs) due to escalating operational costs effective June 1, 2024.
In a memo addressed to its business partners, IB Plc cited inflationary pressures as the primary reason for the price adjustments. The memo, signed by Olaleye Abimbola, the company’s head of sales, outlined the need for the new pricing structure to adapt to current market realities.
“We write wishing the best for you, your family, and your business. This is to notify you, our valued business partner, that we are reviewing prices in our portfolio due to the current market realities, as we work to enhance our pricing models that ensure you are best served by us,” Abimbola stated in the memo.
He further explained that the price review would take effect on June 1, 2024, and requested that all trade partners comply with the new pricing strategy.
The memo emphasized the company’s confidence that the new pricing decision would ultimately benefit all business partners.
“We are confident that this decision will be beneficial to all our business partners. Similarly, we urge you to honour the same pricing strategy we had in the previous months until these changes are announced and implemented. Thank you for your attention,” Abimbola added.
Despite the company’s assurances, the price hike has not been well received by its business partners. Distributors and trade partners expressed concerns about how they would secure the necessary funds to comply with the new prices.
They highlighted that the new interest rate of 22.5 percent and the Cash Ratio Rate (CRR) would make it challenging to obtain bank credits needed to adjust to the new pricing by June 1st.
In the face of these challenges, IB Plc remains committed to its operational goals and returning to profitability.
Earlier this year, shareholders endorsed a rights issue plan to strengthen the company’s financial position. During a second Extraordinary General Meeting (EGM) in April, shareholders also approved a shareholder loan to support the company’s turnaround efforts.
The funds generated from the rights issue and shareholder loan are intended to fully settle IB Plc’s USD loan, which was used for constructing its plant in Ogun State.
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