By Adewale Sanyaolu
Citing rising input costs and the need to mitigate the impact, foremost beverage firm, Nigerian Breweries Plc, has announced a price hike across all its product range effective August 10, 2023.
The latest price review is coming less than three months after a similar hike was carried out on May 17, 2023 with about 30 per cent raise.
Though, the beverage giant in the notice was silent on its new prices, industry observers however said the increase may not be less than 35 per cent.
The company in a price review notification notice with reference: SD/LA09/26 to all its direct customers signed by its Sales Director, Ayo Lawal, explained that the company will deliver at its current prices for all open orders that are fully funded and created in its system before 00.00hr on Thursday August 10, 2023.
Meanwhile, some hotel owners who spoke to Daily Sun in separate interviews said the frequent hike in prices of drinks could be detrimental to business survival. They argued that the frequent hike will eventually led to low sales, return on investment among other negative effects capable of hurting businesses.
A beverage distributor in Abule Egba, Lagos, Mr. Charles Adeoye, said the idea of raising product prices quarterly was not the best for the business, saying it is not all cost that must be passed to consumers.
‘‘We are yet to get out of the effect of the last price review in May and again in August, they have announced another price hike. Our business is volume driven. Once the sales volume drops, it ends up affecting our profit margin’’.
An hotelier in Ikeja, Mr. Chuks Abaribe, said since the last increase in May, sales have dropped drastically as customers have resorted to taking other forms of alcohol, especially hot drinks in sachets which come at a reasonably lower price.
He lamented that while their operational cost have equally gone up due to subsidy removal, they cannot afford to increase prices at a frequent intervals, as businessess doing that will have him or herself to blame.
‘‘Power supply has been bad lately, so that means we have to run on generator to keep our drinks cold. Regrettably, the low margins we make on drinks is not enough to take care of the cost of petrol. So technically, we may be running at loss’’.
Abaribe said Guinness Nigeria Plc did a similar exercise about two months ago when it increased the prices of its product range.