Essaadi: Hike in Excise Duty Will Have Devastating Effect on NB Business

Kayode Tokede

The Managing Director/ CEO, Nigerian Breweries Plc (NB), Mr. Hans Essaadi, has said that the rumoured increase in excise duty by the federal government may have a devastating impact on its business, stressing that the brewery maker is dialoguing with the government.

Speaking at the company’s Pre-Annual General Meeting in Lagos, he said, “It is our firm belief that as a big corporation, we’re partly an alcoholic beverage and part of non-alcoholic beverages but we have to pay our duties and we respectfully want to pay our duties and taxes in full.

“At the same time, the notion of further excise tax increases, including significant ones that are being rumoured at this point in time would have a devastating effect on our business.

“We believe that especially at this moment in time, this is the wrong thing to do. We are in dialogue with the Government but wanted to pay fair amounts of tax without overdoing it because ultimately, an excise tax increase means a price increase in the market.

“Because increases significant mean price increases in the market because it’s indirectly a tax to consumer leading to higher consumer prices with restricted disposable income which will lead to less revenue, but ultimately also lead to more poverty in the market.

“We are not alone as we are a one-off business confronted with these challenges. It is for us to continue to have constructive dialogue with the authorises that excise duty hike at this time is the wrong thing to do.”

He said the company’s in the first quarter of 2023 performance faced challenges amid the scarcity of both foreign and local currencies.

According to him, “We have moved from foreign exchange scarcity to local currency scarcity. Nigeria’s formal economy is based on cash and we have all seen if you disallow people to trade with cash, it allowed the whole economy comes to a standstill.

“The good thing is that we are slowly coming out of it. We do not know what is going to happen with the new government coming May 29^th. Until then, cash has returned to the market and we have seen our numbers improving. But including financing costs, our business is under pressure for profitability.”

He said the company has the right strategy in place and is confident of overcoming 2023 challenges and continuing to be successful.