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Guinness, NB in Renewed Beer Duel(AllAfrica Via Acquire Media NewsEdge) Having explored all the marketing gimmicks to create brand loyalty, promoters of Nigeria's two leading beer manufacturers - Guinness Nigeria Plc and Nigerian Breweries Plc - have now resorted to low blows to outsmart each other, reports Raheem Akingbolu Guinness and Nigerian Breweries, two leading alcoholic and non-alcoholic beverage makers are long-standing rivals. Although the feud between the two companies heightened with the launch of Legend Extra Stout in 1992 by Nigerian Breweries, the truth is that the brand war could be dated back to 1962, when Guinness brewery was established in Lagos. Before then, the NBC (which became the Nigeria Brewing Limited, NBL, and now the Nigeria Breweries Plc was the major manufacturer in the beer sector, while a company was formed to import Guinness extra stout into the country from Ireland. The popularity of this brand later led to the establishment of the Guinness brewery. Over the years, the struggle for market leadership between the two companies has taken many dimensions. There has been corporate struggle between the two concerns and there have been brands' war in various categories. For instance, in the green bottle market, Harp and Star have fought tooth and nail, Legend Extra Stout and Guinness Extra Stout in the stout market and another one in the malt market among Malta Guinness, Maltina and Amstel Malta. Of course, this has led to innovation, price reduction and several activations. Most times, it moved beyond just product development and occasionally got personal, which often resonated in their marketing. Unlike the cola war between Coke and Pepsi, where Pepsi seems to have surrendered; none of the players in the Nigerian beer market has conceded defeat. This explains why the struggle is still on. Latest development In an advertorial published in some national newspapers on Friday, August 29, 2014, a non-governmental organisation; Consumer Rights Advocacy Network of Nigeria (CRANN), had raised the alarm that pirate marketing was going on in the alcoholic beverages industry. The public announcement was titled 'Wake up Call to Consumers!". Under an artistic illustration that shows mimic beer bottles, one big, the other small, the campaigner asked; "Is it legal to give incentives to distributors to remove a competitor's brands from the market just to sell yours?" To demonstrate the statement, the big one is positioned as if forcefully pushing the small bottle away from the centre of action. It therefore went on to state that; "In the past several months, evidence has shown that one of the prominent breweries in the country has embarked on a vigorous and evil campaign of de-marketing its key rival and competitor. The brewery in question goes to major retailers across Nigeria and offers very juicy incentives for them NOT to stock display or sell the products of its competitor. The brewery utilising this pirate approach to marketing has created a situation in which ONLY its products- including a number of beer brands, a Malt drink, and dark ale brew - are the ones available in the market in very many locations in the country." In conclusion, the organisation argued that the situation forces consumers to patronise brands that they might not have ordinarily gone for. On September 3, the campaign was taken a bit further in two separate advertisements. In one, the two brands face each other and begin to fight while the other takes it forward by showing how the taller one named Surulere is pushing the smaller one -Ogba. In a way, the last one tries to situate it in a clearer form. Since Guinness is in Ogba while Nigerian Brewery is in Surulere, analysts were quick to conclude that the various materials were referring to the two leading beer manufacturers in Nigeria. Meanwhile, to give credibility to the campaign, the Consumer Rights Advocacy Network of Nigeria (CRANN) had addressed a press briefing in Lagos a day before the first publication, where its leadership called on the federal government and its relevant agencies to act accordingly before the situation gets out of hand. Speaking at the event on Pirate Marketing in the Nigerian Alcoholic Beverages Industry recently in Lagos, the coordinator of the CRANN, Sina Loremikan, with Nelson Ekujumi and Voke Ighorodje, both members of the network, decried what he described as a "de-marketing endeavour," which "negates the principles that promote fair competition in the Nigerian corporate sector - inclusive of the alcoholic beverages industry." Explaining the worrisome situation, CRANN stated that it was very concerned in recent times as many Nigerians had made complaints to it of "how one of the prominent breweries in Nigeria has embarked on a vigorous campaign of de-marketing its key rival and competitor, with the brewery in question going to major retailers across Nigeria to induce them with very juicy incentives so as not to stock, display or sell the products of its said competitor." The Network, which revealed that its decision to refrain from naming the said breweries was based on the need to remain as non-partisan as possible, while ensuring that a level playing field was provided for all businesses in Nigeria, challenged the media to carry out its independent investigations to verify the claims made. Matters Arising Since the public announcement was published, not a few stakeholders have wondered why the tone of the advocacy suddenly gone personal. A few people have also described the being played by CRANN as self-serving roles that were carried out to cause confusion while the promoters smile to bank. The Chief Executive Officer of Political and Administrative Resource center, Mr. Adebayo Afolabi, who shared this opinion, said such awareness campaign was outside the jurisdiction of the organisation. He said: "To me, this is a mere blackmail and pseudo marketing by CRANN and its sponsors. The question we should all ask is what is the interest of a non-governmental organisation in an issue related to beer consumption? I took pain to follow up the various advertisements and I conclude that they were sponsored by Guinness Nigeria. The brewery giant simply saw the obscure organisation as a tool and explored it. Unfortunately, it is a bad approach because the huge amount spent on the campaign of calumny would have been invested in things that can drive sales. It simply pointed to the fact that Guinness is trying to shift the blame of its recent poor performance in the market place on competition," According to Adebayo, rather than resorting to blackmail, what Guinness should have done was to go back to drawing board and re-strategise. The analyst, who claimed to have seen it coming faulted Guinness distribution network. Citing example of how poor distribution cost the brand its position in the market, he mentioned how many patrons of Gordon Spark had dropped the brand for rival product because of the difficulty they often encountered while struggling to lay hands on it. He also referred to how poor distribution killed Satzenbrau. But in what seems like a reaction to such insinuation, Loremikan told a national newspaper in an interview that what his organisation was concerned with was having equity and fairness in the execution of the laid down rules of advertising governing all players - whether big or small. "As a group, we are not interested in big business in themselves, but on how their actions impact on the right of consumers. Why should leverage be given to one brand at the expense of its competition? This restricts the space for consumer choice and can almost be posed as a question of human rights. Remarkable instances in this direction invite the examples of the Anti-trust advocacy, which has led to legislation in the United States where big corporations seek to muzzle out their competition; this ultimately impacts on the consumer whose capacity to make a choice is infringed upon, and he can only consume what is visible to him despite the availability of better alternatives," he said. But a doctoral student in the department of Marketing, University of Lagos, Mr. Kenedy Nwagwu, in a telephone interview with THISDAY, pointed out that consumers are most times the winner anywhere competition thrives. "If two brands are competing to win consumers' loyalty, the consumer is the winner because will lead to innovation, promote quality and ultimately price reduction. The only competition that is bad is the one that promotes monopoly, if that has not happened then it is a win, win situation for members of the public," Nwagwu, who called on operators in the beer industry to operate within the scope of law and ethics, called on government, especially the national assembly to revisit the competition law. Guinness Response Though the Corporate Relations Director of Guinness Nigeria, Mr. Sesan Sobowale did not admit that his company bankroll the various advertising campaign, he agreed that they align with the company thought. "Yes, we have also seen the campaigns placed by the group and all I can say is that they align with what we have seen in the market in the last few years. As a matter of fact, we are aware that a particular company is carrying out widespread activities to discourage consumers from patronising our products. It is not only a Lagos affair, Abuja or Port Harcourt but nation-wide activities. Promoters of the particular company have been going round, giving various incentives to major retailers not to stock or sell our brands, especially Malta Guinness and Harp. We tried to investigate who is behind this and what is behind this and came up with a few things. We discovered that they have prepared papers for some retailers to sign that if you don't sell x product, we will give you these product free of charge. We don't feel that is fair, we don't feel that is ethical and we don't think that is the way to sell in other economy. By referring to other economy, I'm not talking only about advanced market like Europe or US but in Africa. What is going on in Nigeria today cannot happen in Kenya, the perpetrator will rot in jail. As a matter of fact, we have informed the government through the Consumer Protection Council (CPC). We held meeting with the council a couple of times, they said they want evidence and we shared some of what we had with them. And we saw that they were a bit reluctant. I remember they said to us that they didn't think that was our business. They said our responsibility was to protect the consumers and not the producer. We then explained to them that we couldn't treat it in isolation because if we invest in manufacturing and marketing and our consumers are not allowed to access our products, then that will put us in disadvantage. We went further to tell the council that in their law, there is a provision for them to take this step or that step. Ultimately, the loser in this war is the consumer because it is the consumer that will spend his or her hard earn money and there is a need for value at the end. To us competition is good but it must be fair and just. It is bad when a particular producer uses muzzle and spend money to make sure other players are crowded out of the market. In short, we support what the NGO is doing but truth is that there is no direct contact between us. Having said that, we are hasten to come forward to say we are a victim in this game and we want consumers and the various regulatory authorities to be aware of what is going on," The Deputy Director, Public Relations at CPC, Mr. Abiodun Obimuyiwa have also confirmed in a chat with THISDAY that the council did receive complaint from Guinness. He however said the issue is still being investigated. Consumers' take While the war continues, findings from major retail shops in Lagos reveal that both Guinness and Nigerian Brewery are actually guilty of the same offence. The approach was said to have started when the beer manufacturers and their counterparts in the soft drink segment began to give free chillers to restaurant owners, with the instruction that on no condition should a competition brand is allowed in. When this reporter visited National Theatre, Iganmu, Lagos during the week, it was found out that Nigerian Brewery had a major influence. But the story is different in Oluwole Estate in Ogba, where Guinness seems to be the major player. At Lascofiz, another relaxation centre on Wemco road, Guinness was said to be the sole controller until recently when the monopoly was broken. A restaurateur at the National Theatre, who simply introduced herself as Florence, said it was a business decision reached between NB and the management of the cultural centre. But there was a brick wall when an attempt was made to get an official statement from the theatre. The Director General was said not to be in town and nobody was ready to volunteer any statement. After much pressure, a staff who spoke under the condition of anonymity said it was a decision taken by the government parastatal to generate revenue. He also added that the proposal was first thrown at Guinness but NB came in when the later was foot-dragging. He however declined putting figure to the amount that transpired between the two organisations. Economic relevance NB Plc. and Guinness Nigeria are the two most nationally well-known concerns in Nigeria. They are also among the largest capitalised companies in the Nigerian stock exchange. According to a 1999 report, with 6.2 per cent of the total market capitalisation of the stock exchange, NB Plc. led the list of 188 companies and Guinness followed closely behind. Their products, especially Star beer and Guinness extra stout, are staple products in the Nigerian market. Both companies often boast of their significant contributions to the economy, in particular, through the taxes they pay into government coffers. With the end of the Nigerian civil war in 1970 and the sudden rise in oil revenues in 1973 occasioned by the Arab oil embargo, the country was awash with capital and investing in the beer industry became a major preoccupation of state governments and individuals. At its height in the late 197Os, the sector recorded over 30 breweries in the country. However, a combination of factors, the most significant of which was a significant slide in economic fortunes, led to the closure of many of these breweries by the middle of the 1980s. The regional brands, owned by state governments and individuals, were particularly hard hit. About 3 in 4 of these disappeared from the scene by 1996. Less than 15 breweries survived and have been operating since then. Though the volume of beer produced in the country showed some increase between 1984 and 1994, the level of production was well below installed capacity. Today, the brewing sector seems poised for another round of unprecedented growth, in spite of the economic situation, which has forced many consumers to reduce their spending habits. Copyright This Day. Distributed by AllAfrica Global Media (allAfrica.com). |