Manufacturers Alert FG on Possible Loss of N500bn to Proposed Sachet Drinks Ban

Raheem Akingbolu

The Distillers And Blenders Association of Nigeria (DIBAN), a sub-sector of the Manufacturers Association of Nigeria (MAN), has called on the federal government to reconsider its plan to phase out the sale and consumption of alcohol in sachets and polyethylene terephthalate (PET) bottles, warning that going ahead with the action will cost the Nigerian economyover N500 billion in direct investment and N800 billion indirect investments.

Comprising of over 24 corporate organisations, DIBAN in a letter of appeal addressed to the Minister of State, Health and Social Welfare, Dr. Tunji Alausa, copy of which was sighted by THISDAY, advised the federal government to consider the decision to save their businesses and the 80 per cent of the workforce, that may be laid off.

DIBAN called on the government to direct the National Agency for Foods and Drugs Administration and Control (NAFDAC), who announced the plan to phase out sachet drinks to consider the impact lay-offs, will have on the unemployment market and halt the plan.

The body availed the minister with some background information with a view to providing insights into the industry.  

Among other critical relevant roles they play to strengthen the economy, they pointed out that DIBAN has conglomerate membership of over 24 corporate organisations, majority of whom are indigenous companies with few multinationals currently operating in the industry and are manufacturing wines and spirits with over 70 per cent local inputs. 

They also emphasised that the industry has collective direct investment of N500 billion in the Nigerian economy; while indirect investments by other companies in the industry is well over N800 billion

The body also informed the minister that it contributes in value addition, over N1.2 trillion to the Nigerian economy as well as providing direct and indirect jobs of over 250,000 and 5,000,000 respectively.   

As part of its contribution to the industry, DIBAN reminded the minister to have been part and worked with the Ministerial Committee on the elimination of underage drinking and promotion of responsible drinking by adults as part of the group’s support to the initiatives at strengthening regulatory activities.

The letter also pointed to the fact that the association has been supporting NAFDAC in the campaigns against underage drinking targeted at children below the age of 18 years.

To this end, they claimed that they promote responsible drinking by adults and elimination of fake, substandard and harmful spirit drinks in circulation.

According to the manufacturers, the proposed ban of alcoholic beverages in sachets and small plastic bottles could hurt firms producing them. 

Since the news broke that the government is considering a total ban in this regard, some economic analysts have supported the position of the manufacturers on the basis that most of the firms are small, and implementation of a ban could push them out of business.

Recently, the NAFDAC Director-General, Mojisola Adeyeye, disclosed in a statement that the uncontrolled access and availability of high concentration alcohol in sachets and small volume PET or glass bottles contribute to substance and alcohol abuse in Nigeria.

The position of the NAFDAC’s boss notwithstanding, it’s believed in some quarters that there are fifth columnists pushing the narrative for the ban for their pecuniary interest.

To this end, many analysts have argued that if a ban is placed on the sale of alcohol in sachets and small bottles, it should as well be placed on others in bigger bottles.

In January last year, a former director-general of Nigeria’s largest business think tank, the Lagos Chamber of Commerce and Industry (LCCI), Muda Yusuf said, “It will affect their sales because sachet packaging is mainly to make products available and affordable to those at the bottom of the pyramid. It has become necessary as a result of the high level of poverty in the country.”

In view of this, many analysts, including the manufacturing group, have urged the regulatory agency to shift ground and intensify regulation instead of total ban. According to them, this will achieve two things; control consumption and save the economy.

In line with the clamour in most quarters for proper regulation, DIBAN has advocated for government support in the form of access control and tighter regulations but definitely not ban, which it argues will be counterproductive.