Guinness Nigeria reaches resolution with NAFDAC, pays N11.4m fine

Guinness Nigeria Plc, said it has resolved the dispute it had with the National Agency for Food and Drug Administration and Control, which began in November, when the agency imposed a N1bn fine on the brewer.

NAFDAC had said at the time that Guinness was allegedly re-validating expired raw materials at its warehouse without approval from the agency. It also said that the brewer kept poor records and failed to comply with some of the agencies regulations.

The agency said that the fine levied against the brewer were “administrative charges for various clandestine violations of NAFDAC rules, regulations and enactments over a long period of time.”

Guinness denied the charges and said it was in talks with the agency over the sanctions.

“As a responsible corporate organization, we take these allegations which relate primarily to raw materials stored in one of our stores very seriously,” Peter Ndegwa, Managing Director of Guinness Nigeria said at the time.

“We are engaging NAFDAC for clarifications and resolutions of the issues…… The management of Guinness Nigeria does not fully understand the basis for the computation of the administrative charges nor the particular regulations alleged to have been infringed.”

Not satisfied with the fine, Guinness sued the agency, asking the court to restrain NAFDAC and the Attorney General of the Federation from enforcing the sanction pending the determination of the suit.

At the resumption of court hearing on December 22, 2015, the parties told the court that they were making efforts to settle the matter out of court. The counsel for Guinness, Mr. Olasupo Shasore (SAN), said that representatives of Guinness and NAFDAC were meeting with the hope of resolving the dispute.

At the continuation of the case in February, counsel for Guinness, Mr. B Salihu, told the court that the parties were still holding talks to see if the mater could be settled out of court. Consequently, the case was adjourned to March 16, 2016, for mention.

However, Guinness issued a statement today stating that the company had reached a resolution with NAFDAC.

“Guinness Nigeria can now confirm that a Notice of Discontinuance of the court action instituted against the National Agency for Food and Drug Administration and Control (NAFDAC) and the Attorney General of the Federation has been filed,” read the statement.

“The action was started following the receipt by the company of a letter dated 9th November 2015 from NAFDAC which, among others, imposed administrative charges of one billion naira (N1billion) on the company.

“The termination of the court action was predicated on the letter dated 15th February 2016 from NAFDAC to the company which was stated to ‘supersede the decisions contained in the Agency’s letter dated 9th November 2015′.

“As part of the resolution, NAFDAC would be present during the destruction of the expired raw materials in its rented warehouse and both parties agreed that this would be the procedure for the exercise in the future.”

The brewer also said it had “agreed to pay administrative and service charges to NAFDAC to cover the cost of investigative inspection of raw materials carried out by the agency as well as the supervision by NAFDAC of the destruction of the raw materials which would be carried out by Guinness Nigeria.”

“The administrative and service charges of approximately N11.4m have since been paid to NAFDAC,” the statement said.

Guinness also used the opportunity to express its heartfelt gratitude for the support it has received from the Honourable Minister of Health and from the former Director General and senior management of NAFDAC towards the amicable resolution of the mater and expresses its commitment to maintaining and fostering a strong and mutually beneficial relationship with the agency.

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