Stiff competition made us sell our breweries to Nigerian Breweries Plc, says Sona Group MD

Sona Group, a diversified conglomerate with interest in alcoholic and non-alcoholic beverages, confectioneries, agro allied industries, among others said it decided to sell its interest in Sona Breweries to Nigerian Breweries Plc in 2010 due to strong market competition in the brewery segment.

The Group Managing Director, Sona Group of Industries, Ajai Musaddi, said that competition in the brewery industry between the leading brewery brands like Nigerian Breweries Plc, Guinness Nigeria Plc and others made his company have a rethink to divest from the industry.

It was reported in October 2011 that Nigerian Breweries Plc acquired majority stake in Sona Systems Associates Business Management Limited (Sona Systems) and Life Breweries Company Limited from Heineken N.V. The transaction followed Heineken’s acquisition of controlling interest in five breweries owned by Sona Group in January 2011.

Two breweries owned by Sona Group in Ota and Kaduna and Life Breweries in Onitsha became part of Nigerian Breweries, along with the three brands – Goldberg Lager, Malta Gold and Life Continental Lager beer.

It was reported that the breweries acquired had gone through difficulties, with inadequate working capital, low productivity, poor market share and low employee morale.

There was a lot of competition going on in the brewery segment. Because of the competition, we said we must not involve ourselves so much in the competition. We decided to diversify into other businesses. We also had some other business and wanted to focus more, or start something new,” the MD said.

For 16 years, we ran Sona Brewery. Our beer, Goldberg, Life and others were produced with 100% sorghum. We never used any single grain of imported barley from anywhere, yet our brands were very popular and very accepted by Nigerians,” he added.

Mr. Musaddi added that Sona Group decided to focus its resources on other thriving subsidiaries, instead of fighting a futile market war. According to market survey, the brewery industry in Nigeria is one of the biggest advertising spenders yearly.

The MD revealed that Goldberg, Life Lager and other value brands formerly under Sona Group’s care continue to perform well and have been largely responsible for helping Nigerian Breweries maintain its market leadership and profitability despite the recession. This view was earlier corroborated by Heineken N.V. and brands and market analyst Lampe Omoyele who said that the success of value brands have been the main reason Nigerian Breweries Plc declared a profit in 2015.

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