NAIJA BIZ

Cadbury’s Hot Chocolate Drink is scarce, and border closure could be responsible

Over the past couple of weeks, consumers across Lagos and beyond have been in search of Cadbury’s Hot Chocolate Drink beverage. The product, which comes in sachets and sells for an average price of N80, has suddenly become a truly “hot commodity” no thanks to its scarcity.

This is the first time the product has become this scarce ever since it was launched into the Nigerian market not too long ago. The development has puzzled analysts at Nairametrics, some of whom consume the product.

Connecting the dots

To find out what is happening, we investigated. Across Lagos, shop keepers narrated how shortage in supply is responsible for the product’s scarcity. Our investigation even suggested that the recent closure of Nigeria’s border with some neighbouring West African countries could be responsible. How is this the case?

It should be noted that the Hot Chocolate Drink is manufactured in Ghana by Cadbury Ghana Limited for Cadbury Nigeria Plc. What this means, therefore, is that the finished products are exported to Nigeria from Ghana.

Interestingly, Ghana does not share any border with Nigeria. As such, goods coming in from the country pass through either Togo or Benin Republic. In this situation, this typically drives up costs for both Cadbury Ghana and Cadbury Nigeria. And now that the border closure is effective, it is understandable why supply of the product to Nigeria dropped.

What Cadbury said

Nairametrics contacted Cadbury Nigeria Plc in a bid to better understand the matter. In their response, a brief statement signed by the company’s Consumer Conversations Coordinator, Martha Ogbu, stated that “the product has been discontinued”. There was no further explanation as to why the decision was taken.

In the meantime, the Cadbury Hot Chocolate Drink is not completely absent in the Nigerian market. However, its price has gone up; a resultant effect of high demand and scarcity. If you happen to find it anywhere, you may have to spend nothing less than N100 to buy it as against N80 a few months back.

Still on this

A wide section of Nigerian consumers loves the Cadbury ready to drink beverage because of its affordability. Over the years, a lot of Nigerian companies began packaging their products in smaller (affordable) quantities targeted at low-income earners. This followed the success of Promasidor’s Cowbell which primarily targeted low-income Nigerians from inception.

Now, let’s get to Cadbury Nigeria Plc for a moment. The company’s recently disclosed earnings report for the nine months ended September 30th showed that the company did okay. Its revenue increased by 7% to N28.9 billion, up from N26.9 billion during the comparable period last year.

Profit after tax for the nine months period stood at N648 million, a 277% growth compared to N171.9 million as at September 2018.

The company’s share price is currently trading at N9.60 on the Nigerian Stock Exchange.

 

Source: Nairametrics

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