Analysts Say Consumption Defies Economic Reality As Beer Revenue Surges To N1.54trn

Following the over N1.54 trillion revenue generated by major listed brewers in Nigeria from the sale of beer and other non-alcoholic drinks in the first nine months of 2025, analysts have attributed the strong performance largely to Nigeria’s vibrant social culture, particularly the high frequency of weddings, which significantly boosts social drinking.

They, however, argued that strong sales figures do not necessarily translate into broader economic improvement, noting that consumer spending patterns may be shifting gradually amid persistent macroeconomic pressures.

LEADERSHIP reports that unaudited financial statements of Nigerian Breweries Plc, International Breweries Plc, and Champion Breweries Plc for the nine months ended September 30, 2025, show that the companies collectively recorded robust top-line growth, driven mainly by beer sales.

Nigerian Breweries Plc, the country’s largest brewer, posted net revenue of N1.05 trillion for the period, up from N710.87 billion in the corresponding period of 2024. Cost of sales stood at N631.23 billion, resulting in a gross profit of N415.15 billion.

After accounting for selling and distribution expenses of N193.85 billion, administrative expenses of N59.58 billion, finance costs of N39.15 billion, and other charges, the company recorded a profit after tax of N85.51 billion, compared with a loss of N149.50 billion in 2024. Basic earnings per share rose to 275 kobo from a loss of 1,455 kobo in the previous year.

In March, Nigerian Breweries announced a return to profitability in the first quarter of 2025, reporting a 186 per cent increase in net profit compared to the same period in 2024. Its unaudited results on the Nigerian Exchange Limited showed that revenue for the period ended March 31, 2025, rose to N383.6 billion, representing a 68.9 per cent increase from N227.1 billion recorded in the first quarter of 2024.

International Breweries Plc, which operates in Nigeria and other West African markets, generated revenue of N472.57 billion for the nine months ended September 30, 2025, up from N343.45 billion in the same period of 2024.

The company reported a profit after tax of N57.83 billion, reversing a loss of N112.81 billion in 2024. Cost of sales increased to N311.64 billion from N248.58 billion, while administrative, marketing, and distribution expenses rose to N92.09 billion from N72.68 billion.

Analysts said the figures underscore the resilience of Nigeria’s beer market, which continues to benefit from strong brand loyalty and extensive distribution networks despite rising production costs and broader economic headwinds.

Speaking to LEADERSHIP, the managing director of Globalview Capital Limited, Aruna Kebira, noted that the frequency of weddings plays a notable role in driving social drinking.

According to Kebira, alcohol consumption often rises during emotional moments, whether celebratory or distressing.

“It is widely believed that alcohol serves different purposes for individuals based on their emotional states. For instance, people often turn to drink during moments of sadness, using it as a means to cope and uplift their spirits. Conversely, when someone experiences joy, they may indulge in alcohol to extend that sense of happiness. Additionally, in times of loss or grief, many find solace in drinking as a way to escape their sorrow momentarily,” he said.

Kebira emphasised that alcohol consumption has become deeply embedded in Nigeria’s social life. He observed a rapid increase in beer parlours, noting that they were springing up faster than even established institutions such as churches.

He explained that in many neighbourhoods, small shops are converted into makeshift beer parlours each evening, effectively transforming entire streets into nightlife hubs.

According to him, “some people drink simply because they have the financial means to do so, while others may indulge as a way to forget their worries, regardless of their socio-economic status.”

He added that this duality shows that alcohol consumption cuts across both celebration and coping mechanisms.

“There is always a reason for individuals to drink. Whether to celebrate joyous occasions, escape from life’s challenges, or for social engagement, alcohol remains a significant cultural element in Nigerian society,” Kebira stated.

Also speaking to LEADERSHIP, the managing director of Cowry Asset Management Limited, Johnson Chukwu, said beer consumption is not a reliable indicator of economic optimism.

He explained that beer is largely insulated from economic cycles, noting that people drink when the economy is good and continue to drink when it is bad to cope with hardship.

Chukwu argued that the figures being reported may not accurately reflect actual consumption levels, as rising revenues are partly driven by inflation, naira devaluation, and price increases rather than volume growth.

“What we have seen is the amount spent in naira terms, which may have gone up due to inflationary pressures and currency devaluation,” he said.

According to him, the more accurate measure should be the volume of beer consumed.

“What should be measured is the hectolitres of beer consumed, not necessarily the monetary value, because changes in prices since 2023 have clouded the real level of consumption,” Chukwu stated.

On his part, the national coordinator of the Progressive Shareholders Association, Boniface Okezie, highlighted the link between consumer behaviour and economic realities in the brewing sector.

He observed that many Nigerians resort to drinking to cope with economic challenges when expectations from governance are unmet.

“This social dynamic shows that despite economic hardship, there is still a strong market for beer as people continue to spend on alcohol to relieve stress and enjoy social gatherings,” he said.

Okezie noted that Nigerian breweries are experiencing a rebound in profitability, driven by exports and sustained domestic demand. He added that even during tough economic times, people continue to patronise bars and social outlets, boosting sales and tax revenues.

However, he raised concerns over the distribution of tax proceeds from alcohol sales, particularly in regions where alcohol consumption is restricted, and called for a fairer allocation of such revenues.