Festus Odimegwu The former CEO of Heineken in Nigeria engaged sex workers to promote beer. The company benefited from its close relationship with the president. Excerpts from “Heineken in Africa”, a book by Olivier van Beemen, a Dutch citizen, released in February 2019, takes a critical look on the business practices of the Dutch brewer in Africa, Odimegwu talks about his days and exploits at the helm of Nigerian Breweries Plc. The text was translated from Dutch to English using google translate. Please pardon us for any lost translation.
Festus Odimegwu lives in a lush neighborhood of Abuja, the capital of Nigeria. In his village of origin he is traditionally king and his villa in the city is also a lavish palace. A footman from Benin – staff from the French-speaking neighbor is considered chic in Nigeria – serves champagne.
Odimegwu was head of Nigerian Breweries between 1999 and 2006, the culmination of a glorious career that began in 1979 when he entered as a brewer in training. Under his leadership Heineken acquired a majority share in the Nigerian brewer, which became one of the most important subsidiaries in the world. The largest Heineken brewery in Africa was established in the center of the country.
In an interview in 2010 in Het Financieele Dagblad, Tom de Man, then Heineken’s Middle East Manager, unveiled one of the keys to success in Nigeria. “You have to find a general manager who can withstand threats and knows how to minister to a minister,” he said.
Such a person was Odimegwu like no other. His period as a top man almost coincided with the presidency of Olusegun Obasanjo. The businessman sat in all sorts of advisory councils of the president and visited him regularly in his villa in Ota outside Lagos. “With every important decision he asked my advice,” says Odimegwu.
This came in handy when competitor SABMiller, now absorbed into AB InBev, wanted to join the Nigerian market in 2003. For a long time there was an informal agreement between Heineken and the British competitor Diageo. Heineken dominated the lager market, while Diageo dominated the market for dark beer (stout) with the Guinness brand. A third player would push the win, but Odimegwu did not let it go. “Because of my actions they were faced with all sorts of administrative difficulties, for example with the necessary permits,” he says. “In some countries this would go against competition laws, but we do not.”
In addition, Odimegwu managed to prevent a planned tax increase. “The Minister of Finance wanted to double the excise duty, but I told her that she should not. And it did not happen. It’s that simple, “Odimegwu explains.
When the brewer sold so much beer in a top year that there were insufficient raw materials available, Odimegwu was given permission to use the strategic grain stock of Nigeria. He kept the land for times of famine. “We were surprised by our success. The president summoned the Minister of Agriculture, a Muslim, that he should make the strategic grain available to me. “If you do not, I will abolish you and make Festus minister,” he warned. I could let Obasanjo do what I wanted and Heineken benefited. There was no famine that year. ”
But what if it had been there? Odimegwu does not see the problem and guarantees that there was no question of bribery: his influence on the president was sufficient. He admits, however, that the PR budget is generously used for politicians and other influential authorities. “You give a million naira [at that time about 5,000 euros, ed.] Here, a million there. Otherwise you do not do business in Nigeria. ”
Pay for beer caps
At the beginning of this century Odimegwu was confronted with a “declaration of war”. Diageo violated the informal agreement by starting a big campaign for the own beer brand Harp. That could not remain unanswered. Nigerian Breweries also made stout beer, Legend Extra Stout, but sold little of it and that had to change.
How could Odimegwu compete against an iconic and extremely popular brand? “We asked ourselves the question: where does the brand affect the customer? In the cafe. And how do we reach the customer as efficiently as possible? Firstly through the bartender. We therefore pay him for the beer caps that he hands in with us. And then you have the prostitutes. The senior and middle class in Nigeria drinks in clubs without prostitution, but poor people go to bars where you pay 2,000 naira [then a small 10 euro, ed.] To go to bed with a woman. You give her gonorrhea and you get HIV back. Our chances were there. ”
And so the company set up training courses for the sex workers. “There are prostitutes working in hotels, the leaders who train new colleagues. For them we had a separate program. Make sure your client, your sex partner, drinks Legend instead of Guinness, because that gives you energy. ”
The company appointed 500 bars with high turnover to ‘hotspots’, where prostitutes had to promote the beer. Were they encouraged to go to bed with clients? “What is that for a question now? Of course! They are prostitutes. What do they do to you in the red light district in Amsterdam? ”
Gratefully, Legend surfed on clever campaigns by Guinness, in which insinuated that stout beer leads to better performance in bed. Many African drinkers, even outside of Nigeria, believe that. Odimegwu: “It is nonsense, of course, but perception is reality. Scientifically alcohol is a depressant: it cannot improve your performance. But our customers are not scientific. Otherwise our churches would not be so crowded. ”
According to the anniversary book Sixty Years of Winning with Nigeria (2007), in which the Hotspot Scheme is described as ‘a bold initiative’, the sales figures doubled within a year and, according to Odimegwu, there was ultimately quadrupling.
The controversial practices of Odimegwu brought the subsidiary a lot of commercial success. “He had the qualities to be the first African to join Heineken’s board of directors in Amsterdam”, says a Dutch personnel manager who met him up close. “If he had kept himself a bit further from politics.”
Gradually the CEO put less and less time in the management of the brewing company and he threw himself into politics with increasing devotion. He became one of the most ardent advocates of a third term for President Obasanjo, for which a constitutional amendment was necessary. The open dedication went Heineken in the end and in 2006 the CEO was fired. The political career of Odimegwu has never completely got off the ground, but in 2019, he considered making himself eligible for the presidency.