Proposed forex ban fallout: Some milk brands will go, says Orimolade
Former Country Manager, NZMP Fonterra Nigeria Limited, Femi Orimolade, has taken an analytical view of unfolding trends in Nigeria’s dairy consumer market and projected that following the recent government proposed ban on forex, some “opportunistic” milk brands are likely to go off the market shelves.
According to the renowned dairy industry expert, with the likelihood of those opportunistic brands going off the shelves, the big major brands will survive and maintain their dominance of the milk market.
Orimolade, who was personality guest at MARKETING EDGE on TV, TV Continental programme noted that in the event of a forex ban, consumers in the milk sector would experience slight adjustment by major milk brands both in price as well in grams re-packaging.
“Some brands would go because I recall, in 2016, some brands even went as far as reducing the gramages in their larger packs so that they don’t trigger the prices too far and out.
“Basically as it were, to a large extent, the Nigerian consumer will continue to take milk in whatever form. The only challenge is that the cost per gram of milk to them will increase in whatever form; either at price or gram level,” he said.
He continued: “So, no matter the market or consumer segment you find yourself, you will feel the impact. But to a large extent, Nigerians will continue to consume milk because we say or we believe that milk is one of the cheapest accesses into nutrition. So, milk market will still continue to be very strong; it’s only that the cost of consumption per gram would increase.”
He added that in the short term, the ban would spark off an initial low level of activities in the marketing and advertising sub-sectors but explained that in the long run, it would overcome the initial shocks after which marketing and advertising activities will fully resume in the sector.
Describing the Nigerian consumer market as being young and dynamic in nature, the dairy expert expressed strong optimism that the Nigerian economy would ultimately jump out of the woods and play central a role in the global economy.
“Like I said, the Nigerian market is a young, vibrant market. It’s growing even though it has its own draw backs as it were. But it’s a very dynamic market and it’s got a lot of energy. All that is needed is just a little impetus and then you will see the market would begin to flow.
“The challenge with the Nigerian consumers is for them to be empowered financially. We are a consuming nation. A young growing nation would consume, a market that is in the average of 19 is still growing. It still has 2 years for it to reach its full potentials from a growth point of view. So, they are looking for those products that will actually help them achieve those potentials,” he highlighted.
Recall that the Central Bank of Nigeria (CBN) governor, Godwin Emefiele, recently announced that there was no going back on the apex body’s planned policy to restrict forex allocation to importers of milk. At the end of the Monetary Policy Committee meeting for July, the official said the CBN was determined to go ahead with the policy to help conserve between $1.2 billion and $1.5 billion the country spends on the importation of milk every year.
However, amidst a public outcry by Nigerians, the CBN said there was neither a plan nor a decision to ban the importation of milk into the country, adding that it had no legal power to do so.
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