Following myriads of problems facing the brewery sector, Nigerian Breweries (NB) Plc, has called on the Federal Government (FG) 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 its 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 and high cost, occasioned by rising inflation and naira devaluation are already putting margins under pressure.
Essaadi categorically stated that additional excise burden will further cripple business performance in 2023 because relief on prolonged forex scarcity is not assured. Furthermore, 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 price 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.
Although, he pointed out that the nation’s macro-economic indicators, security, and infrastructure had remained at high risk however expressed optimism about the growth potentials of the economy despite current hard times.
“2023 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, but 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 presently 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 its shareholders and is confident of its strategy to achieve its goals.
On its export strategy, he said the firm plans to develop the finished products(the brands) in the markets where those brands are established.
“We can start growing the volume in those markets and make it more structural. Last year, we had some resources that were sent to three the African countries: Cameroon, Liberia, and Guinea.
