Nestle Nigeria’s Marketing Cost too High—Shareholders

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**Demand Bonus Shares

By Modupe Gbadeyanka

Shareholders of Nestle Nigeria Plc have expressed concerns over the huge amount used by the company for its marketing and distribution of goods across the country.

The shareholders advised the management to look for creative ways to carry these functions with lesser amount of money.

In the 2018 financial year, Nestle Nigeria said it spent N43.4 billion for its marketing and distribution, which the shareholders said was too high.

They urged the company, one of the largest food and beverage companies in Africa, to decentralise its operations so as to save cost.

However, National Coordinator of Progressive Shareholders Association of Nigeria (PSAN), Mr Boniface Okezie, who spoke at the firm’s Annual General Meeting (AGM) on Tuesday in Lagos, praised the board and management for ensuring steady and enhanced dividend payment over the years.

He said shareholders would appreciate the issuing of bonus shares to the investors going forward, urging the board to give this a thought.

Addressing shareholders at the meeting, Chairman of Nestle Nigeria, Mr David Ifezulike, going forward, “We will continue to leverage our research and development capacities to delight our consumers while creating value for our business and everyone across our value chain.”

He added that, “We are confident in the capacity of our people, our dedication to deliver high quality, tasty nutrition choices to our consumers and the continuous support of our stakeholders, we look towards 2019 with cautious optimism.”

Commenting on the company’s performance in 2018, Mr Ifezulike said the 2018 financial year was occasioned by unpredictable changes in the business environment, noting that the influx of competing products presented both a challenge and an opportunity for innovation to continue to delight consumers.

According to him, economic activity remained relatively weak in the fourth quarter of 2018, after the slight increase in activities in the third quarter due to higher oil production.

“On the average, spending power further decreased due to the elevated inflationary pressures as we witnessed more value driven consumption decisions,” he said, adding that despite the harsh operating environment, revenue increased by nine per cent while profit after tax rose 28 percent.

He added that in line with the policy of making shareholders the ultimate beneficiaries of the company’s business growth, the board recommended a final dividend of N30.517 billion or N38.50 per ordinary share.

“As in the past years, Nestle Nigeria brands remained leaders in their categories even with the influx of competitive brands in the market,” noting that marketing initiatives focused on creating nutrition awareness for its consumers who trust the brand’s ability to deliver high quality nutritious products.

He added that the extension of single serve pack formats has helped Nestle to drive penetration of its brands, even as it invested in expansion of its routes to market, working with a motivated and dedicated distribution network.

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