6 January 2013

Nigeria: Wine Industry Under Threat From Foreign Brands

The local wines and spirits industry with a combined 125,000 work force, contributing N40 billion corporate taxes and Valued Added Tax, VAT, per annum and accounting for N2.17 trillion market capitalisations on the Nigerian Stock Exchange, is now under threat of closure from smuggled foreign brands.

Are Fatai Odusile, Executive Secretary of the Distillers and Blenders Association sub group of Manufacturers Association of Nigeria, who raised the alarm, said unless the Federal Government takes a decisive action against the development, companies in the sector will soon go the way of Afprint, Enpee Industries, Kaduna Textile Limited; Berec, Dunlop and Michelin.

He disclosed that at the last counts, there were over 450 brands of foreign wines and spirits circulating in the market, claiming that these products are illegally smuggled into the country from regions and countries like South Africa, Asia, India, and Europe.

Odusile, pointed out that Nigerian manufacturers are not afraid of competition but craved a level playing field for all, adding that the development, if unchecked and curbed immediately, might lead to the collapse of indigenous companies producing wines and spirits with its attendant negative impact on Nigerian economy.

Tunde Abdulraham, Chairman of FOBTOB, called on the Federal Government to urgently abrogate the legislation that allows unrestricted importation of alcoholic beverages, wines and spirits, while insisting that any interested investor should be encouraged to come and set up manufacturing facilities in the country instead of taking shortcut that are economically and socially dangerous to the country.

He urged government and other stakeholders to heed the cries of local manufacturers of wines and spirits in order to avert the looming crisis. He recalled that similar events led to the death of several promising sectors in the country such as batteries and tyres.

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