Distillers, MAN urge FG to reconsider new duty on alcohol, tobacco

The Distillers and Blenders Association of Nigeria (DIBAN) has appealed to the Federal government to suspend the implementation of the new excise duty increase on alcohol and tobacco, warning that its imposition could affect the industry’s fortunes and lead to massive job losses.

The association was speaking on Wednesday at a joint news conference held with the Manufacturers Association of Nigeria (MAN) at their Lagos office to protest the new excise duty increase on wines and spirits. The group vowed to resist what they described as “astronomical hike in the excise duty”, lamenting that it will endanger over 250,000 jobs and put at risk investments worth over ₦420bn.

The protesters said they are not against the government’s effort to raise revenue, but that the excise duty increase was too high and would hurt the economy and lead to increased smuggling of foreign wines and spirits into the country.

Speaking at the protest, DIBAN said they would resist the new excise duty regime, calling it “an attempt by the Minister of Finance, Mrs Kemi Adeosun to foist an IMF agenda on Nigeria.”

The Chairman of DIBAN, Chief Patrick Anegbe, said the development will further compound the hardship of already impoverished Nigerians.

He explained that the new duty on spirits translates to an increase from current average price of ₦30 per litre to ₦150 per litre in the first year and rises to ₦200 per litre in later years.

Explaining further, he said that per case (carton) price would rise from an average of ₦270 to ₦1,350 per case in the first year and to ₦1,800 per case in the second year.

The DIBAN Chairman, who is also the Managing Director of Intercontinental Distillers Limited, one of the nation’s biggest producers of alcoholic spirits expressed concern that the new tariff increase would lead to the collapse of the local industry and pave way for the complete takeover of the wines and spirits market by imported and smuggled brands.

“We are also disturbed that the new hike will not only affect the Wines and Spirit industry but also other key sectors of the economy and businesses such as Packaging industries, Bottles, Cartons, Labels, Cork, Laminates, glue, Ink, Printing, laboratory, Marketing, Consulting, Media, to mention a few”.

“We are particularly worried that our industry investment of over ₦420 billion is being threatened by the recent upward review of Excise duties on locally produced Wines and Spirits. We strongly hold the view that if the intention of government is to grow local industries, imposing exorbitant duties on locally manufactured goods is a contradiction of that objective,” he said.

Anegbe further said that the excise duty hike will lead to many local manufacturers shutting down, giving room to fake and adulterated products.

Also speaking at the event, the Director-General, MAN, Mr. Segun Ajayi, said that the timing of the Federal Government’s implementation of excise duty increase on wines and spirits was not well thought-out considering the economic hardship in the country.

“The rate is astronomical. This means that there will be 545% on a product that is majorly consumed by the people at the low-end of the market. What you have is raising the hands of the foreign brands. We need to be very strategic because it is a trade issue”.

“If you increase the excise duty because you want to guarantee the health safety of the consumers, you might be doing this in the other way round”.

Ajayi urged the federal government to reconsider its position, saying that the market place is a competition between foreign and local brands and that the consumers will bear the brunt at the long run.

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