LESS IS MORE

The ban on sachet drinks is detrimental to the economy, argues Gabriel Osaro

This is not the best of times for Nigeria and Nigerians. From any angle one chooses to look at it, the country is already edgy. Economy is in comatose, the masses are suffering, multinationals are relocating while many local manufacturers that cannot withstand the current tense economic climate are folding up. The future looks bleak and no solution is in sight yet.

In the midst of all these, the National Agency for Food and Drug Administration Control (NAFDAC) wielded the big stick last week and put an end to the months of speculations on the ban of drinks in sachets and pet bottles. Expectedly, the clampdown on the manufacturers of the alcoholic beverages attracted mixed reactions, with many experts arguing that the decision is not only harsh, the timing is extremely wrong, considering its multiplying effect on the economy. 

However, one question nobody has answered is whether the regulatory agency was sincere in its decision or playing out a script of some fifth columnists. Pundits have argued that the latest resolve by NAFDAC was as a result of some clandestine moves made by those whose businesses are threatened by the success of pet and sachet drinks in the market.

According to the Director-General of NAFDAC, Mojisola Adeyeye, 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 that there are fifth columnists hanging somewhere and pushing the narrative for the ban for their pecuniary interest. The issue many are raising is whether substance abuse is peculiar to the sachet drink market alone. 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 such as Vodka, Johnnie Walker, among others.

Therefore, linking the ban on the fact that sachet drinks promote abuse is laughable considering the fact that alcohol has a limited contribution to today’s youth substance abuse. We all know the truth but we are looking for scape-goats without minding the consequences. At various fora, the fact that the real problem is from other substances- tramadol and other substances, has almost become an overkill but only a few stakeholders cared. At least, victims of kidnap in the hands of Boko Haram and others are always quick to narrate how the perpetrators rely on heavy drug influence to act dastardly.

Specifically, in March last year, Nigerian Breweries, the country’s largest beer manufacturer, announced its worst sales in 15 years. The decline in sales, according to the company, was due to a drop in beer consumption caused by cash scarcity in Nigeria. The cash scarcity has severely impacted the purchasing power of Nigerians across the country. Beside the global economic crisis, the drop in consumption occurred as the Central Bank of Nigeria drained about 2.1 trillion old naira notes off circulation.

According to a 2021 report by Afrinvest, Nigeria’s protracted FX scarcity occasioned by reduced inflows from crude oil sales and the resultant currency pressures has continued to impact the cost structure of brewers such as Nigerian Breweries, International Breweries and Guinness.

The report stated that despite the adoption of backward integration policy aimed at increasing the share of locally produced raw material in production inputs, Nigeria’s major brewers still depend on large raw material importation to bridge the gap created by domestic supply gaps.

Despite being a common societal norm, the increasing rate of alcohol consumption in Nigeria has since created competition among makers of alcoholic drinks. The general public is now exposed to choices that suit their desires and budgets, which determine the type of drinks they take.

In the recent time, as far as alcohol is concerned in the Nigerian context, beer, bitters and spirits have been at loggerheads in the market space, struggling to make sales to gain more market value among alcohol consumers at large.

But beyond emotions, I think stakeholders in Nigeria, especially the economic drivers need to consider the far-reaching adverse effect of the recent ban on the economy. Rather than throwing away the baby and the bath water, the point being raised by various labour unions and the beverage manufacturers deserves some attention.  Specifically, one is moved to tears by the recent analysis by the Executive Director of Stellar Beverages, Gandhi Anandan, who didn’t only condemn the decision of the NAFDAC to ban the production, sale and distribution of alcoholic spirit drinks in sizes below 200ml in both sachets and PET bottles but gave a statistical details of the investment in the sector and the loss that would herald the ban.

In a statement on Thursday, February 8, Anandan said the action would have a drastic effect on Nigerians. He said manufacturers were dismayed by the unilateral action taken by NAFDAC last week regarding the ban.  According to him, not only does this action unnecessarily put at immediate risk the 500,000 direct and 5,000,000 indirect jobs of those working for the spirit drinks industry and their suppliers but also the traders who rely on this category for their businesses and livelihoods.

I personally support his argument that to do so at a time when people are already under tremendous economic pressure is not only insensitive but unjustifiable.

The manufactures are currently thinking of their dedicated workforce and customers at this worrying time as stakeholders continue to engage with relevant authorities in the government with the hope of achieving a responsible resolution.

 To me, we seem not to consider the fact that moderation and responsible drinking promotes good health. Small is good, if you buy small you will consume small. If you buy big, you will consume big and that to me is not healthy.

 Bigger sizes encourage consumption of bigger portions, while small sizes encourage portion control. If NAFDAC takes away small sizes, the agency is simply encouraging excessive consumption of alcoholic beverages.

As things are, to go ahead with the ban based on perceived danger, without empirical information and not minding the consequences is to me, unfair to the industry operators, the millions of workers who will lose their jobs and is inimical to the Nigerian economy.

Another thing that attracted me to add my voice is the position of the Manufacturers Association of Nigeria (MAN) that objected to the ban placed on spirit drinks in sachets and PET bottles because the reasons the agency alluded for the ban were not backed by empirical evidence.

Finally, is it not an irony that the same agency that licensed the manufacturers is the same agency calling for their head? Does it mean due diligence wasn’t followed when it gave its nod to the local and foreign manufacturing companies to ship in equipment worth billions of naira into the country? Has the agency and its promoters paused and considered that the clampdown threatens over N800 billion investment and throws about 5.5million people into the labour market? Has anybody linked ripples being generated by the decision to the current economic crisis in the country, especially at a time when Nigerian leaders are junketing all over the world in search of Foreign Direct Investment?

We don’t need a soothsayer to tell us that this policy would amount to unnecessary and avoidable debilitation of the business of local and indigenous investors who through thick and thin have kept faith with the Nigerian economy. The companies involved have continued to invest and reinvest at enormous cost in the economy and in the Nigerian people who are the bulk of their nearly N500,000 people workforce. This is in spite of the daunting challenges that businesses have faced in the difficult times, which if we must emphasise, has led to several companies closing down and foreign investors leaving the country.

On the final note, many Nigerians are convinced that this present administration’s Renewed Hope Agenda will not be best served with this ban. If the administration is committed to encouraging and strengthening local investors, then this ban should give way to access control.

*Osaro, a market research expert, writes from Benin