Following myriads of problems facing the brewery sector, Nigerian Breweries (NB) Plc has urged the Federal Government to reconsider its stance on excise duty increment to enhance business growth.
Speaking to journalists ahead of the firm’s 2022 yearly general meeting in Lagos, the Managing Director, Hans Essaadi, said any further increment would have a devastating effect on business operations.
According to him, it is not a good time for further increment, considering the numerous macroeconomic challenges, which the manufacturing sector is already grappling with.
He pointed out that low disposable income as well as high costs occasioned by rising inflation and naira devaluation are already putting margins under pressure.
Essaadi categorically stated that an additional excise burden would further cripple business performance in 2023 because relief on prolonged forex scarcity is not assured.
He noted that the performance of the beer industry has been a reflection of the economy, noting that the industry has been undergoing slow growth mainly due to low consumer purchasing power.
“We are in dialogue with the government on how we can pay a fair amount of tax, because excise tax duty increment will result in a price increase in the market, leading to higher consumer prices amid restricted disposable income.
“This will also lead to less revenue and poverty will also increase. Excise hikes at this point are the wrong thing to do. Any significant increase would have a devastating effect on our business,” he said.
He pointed out that the country’s macro-economic indicators, security and infrastructure had remained at high risk, but expressed optimism on the growth potential of the economy despite current hard times.
“This year has been extremely difficult, from fuel scarcity to money scarcity. There are hundreds of markets and small outlets and the way they operate is a cash market, Nigerian formal economy is based on cash. It has been tough, the good thing is that we are slowly coming out of it. Cash is out in a gradual process, and we are for seeing our numbers improving.”
He noted that the company’s focus currently is to maintain a leadership position in the market by leveraging the history, footprint, brand, portfolio and people to drive a responsive pricing strategy and prioritise cost and value.
He assured stakeholders that the firm is committed to long-term value creation for it is shareholders and is confident in its strategy to achieve its goals.
On its export strategy, he said, the firm plans to develop the finished products (the brands) in markets where those brands are established.
