By Charles Nwaoguji
Distillers and Blenders Association of Nigeria (DIBAN) under auspices of Manufacturers Association of Nigeria (MAN)has rejected the new astronomical hike in excise duty being selectively imposed on the domestic wines and spirits, one of the oldest and thriving indigenous industries in Nigeria.
According to the Chairman of DIBAN, Engri. Patrick Anegbe said the new duty being approved for implementation by Federal government translates to an increase in duty from the current average of N30 per litre to N150 per litre in the first year and N200 per litre subsequently; this translates to an increase from current average duty of N270 to N1350 per case (carton) in the first year and N270 to N1800 per case (carton) from the second year.
Anegbe, who stated this at media press briefing, held yesterday in Lagos, said that this is an increase of over 500 percent purely on local wine and spirits with the exclusion of all imported wines, sprits and champagne.
“We reject in totality, the highly punitive and selective astronomical hike in duty, a purely IMF agenda being camouflaged as a health concern. We are sad to note that this is an attempt by the minister of Finance to foist an IMF sponsored agenda on Nigeria which will further compound the hardship of already impoverished Nigeria, “ he explained.
He stated that manufacturers are worried that the job of over 25,000 Nigerians plus over 250,000 connected SMEs staffs are being threatened by this hike.
He noted that if implementation of the new duty hike is allowed to process, there will obvious job losses that will result from low demand of the products.
He further stated that the new hike would lead to the collapse of the indigenous wines and spirits segment and pave way for the complete take over of the Nigerian wines and spirits market by the imported and smuggled brands.
“We are also disturbed that the new hike will not only affect the wines and spirits industries, Bottle, Cartons, Labels, Cork, Laminates, Glue, Ink, Printing, Laboratory, Marketing, Consulting, Media and etc, “ he stressed.
He observed that from a recent study carried out by KPMG, it was concluded that price elasticity of the spirit/wines segment is very high such that a 10 percent increase in the price of wine would lead to about 20.9 percent fall I demand whilst a 19 percent increase in price of spirit would result in a 41 percent declined in volume and this is predominant in the low priced segment which represent 78.65 percent of the total volume.
He said with over 500 percent increase approved by the government, the damage this would cause to locally produced wines and spirits business can only be imagined.
He stated that manufacturers are not against moves by government to increase fiscal revenue, however, for government to achieve its revenue generation plan, continued existence of the indigenous low priced segment players is very critical.
He called on the federal government to halt the implementation of the new duty hike and hold genuine consultation with all stakeholders in the domestic wine and spirits space, to save the jobs of thousands of Nigerians as well as ensure the continued survival of one of the oldest indigenous industry , the wines and spirits sector.