Nestle Nigeria Plc, which suffered a decline of about four per cent in its first quarter ended March 31, 2013, may record a further decline in fortune as the company said consumers spending would be affected by the Islamist insurgency in the North of Nigeria.
Bloomberg News quoted the outgoing managing director of Nestle, Martin Woolnough, as saying: “There is bit of a depressed consumer feeling at the moment, certainly driven a lot by what’s going on in the north. There’s definitely stress on the economy.”
According to him, Nestle, the largest food company in Nigeria, temporarily withdrew about 10 of its sales staff members from the three states for a week, the second time in four years it has evacuated employees since the insurgency began.
He said the marketing of products in the North is being hampered.
“We can’t get teams up there. That’s likely to impact the middle to long term brand equity in the future. People still need to eat food and cook their stews, so fortunately we are less affected in the north than other products would be,” said Woolnough, referring partly to the company’s food seasoning Maggi, which he said was a “very strong brand” in some areas affected by the fighting.
The Nestle boss noted that prices are going up, “there’s no doubt inflation is real. I would suggest it’s higher than officially shown, especially when you think about food. It’s bigger than people can accommodate in normal life.”
Woolnough added: “We’re absorbing most inflationary related impacts and finding other cost-saving initiatives to offset, but there are other companies and smaller ones that are really going out of business, small businesses just cannot keep up with that pace.”
President Goodluck Jonathan imposed emergency rule in the North-eastern states of Borno, Yobe and Adamawa on May 14 to step up the fight against Islamist militants, who he said were taking over parts of the country.