Nigeria: IDL Consolidates Market Position

14 November 2019

Raheem Akingbolu reviews the recent call by the management of Intercontinental Distillers Limited on government to review excise duties

With many business owners within and outside African continent looking in the direction of the Nigerian market, the terrain appears to have become more competitive. Consumers too seem to have become more sophisticated and selective. As a result of this, each of the players is engaging the market through different positioning approaches to gain competitive edge. Of course, some have come out with feedback of good results while some have failed.

Business owners are fond of publicity stunt and marketing strategies to push their brands in the marketing place. In Nigeria, two sectors - the fast-moving consumer goods and food and drinks, appear to be the most popular in this regard.

Meanwhile, a recent global forecast of wines and spirits market projected that the value may reach $1,122,578 million, and is expected to grow at 4.8 per cent by 2022. Nigeria's spirit market is worth $2 billion and also to grow at six per cent on average per year, according to a published report by the United States Department of Agriculture (USDA) in their Global Agricultural Information Network (GAIN).

Beside the expected growth in the coming years and the contribution of the sector to Nigeria's GDP, the industry also employs over 25000 Nigerians with a multiplier effect of over 250,000 through the connected small businesses and retailers.

As a result of the market potential, the market has, in the last ten to 15 years, witnessed stiff competition among top players.

Clog in the business

A recent report Africa's revealed that Nigeria has improved its ranking on the latest World Bank ease of doing business index, but some analysts maintained that the report doesn't necessarily mean an improved economy -- and that the country still has anti-business policies. According to the report, Nigeria now ranks 131 on the World Bank's Doing Business 2020 index, released recently. The country was said to have moved up 15 places from its 2019 spot and has been tagged as one of the most improved economies in the world for running a business.

The index is a yearly ranking that assesses the business environment in 190 countries using various indicators including paying taxes, trading across borders, starting a business and protecting minority investors.

This notwithstanding, players in the manufacturing sector are still gnashing their teeth as a result some government policies that are frustrating their efforts. But because of the alluring nature of the market and the commitment of stakeholders in the sector, they have consistently repositioned to survive against the odds.

Managing Director of IDL, Patrick Anegbe, recently made a subtle request to government on behalf of other players. Speaking at the annual distributors awards and relaunch of the company's alcopop Brand -Teezers, appealed to the Federal Government to review downward, excise duties for Wines and Spirits. He also lamented the bad infrastructure, especially roads linking major cities. He said the current state of the roads have become a hindrance in the distribution of products and goods across the nation.

He said: "The business-operating environment in the year 2018 experienced the usual challenges which took its toll on companies. With respect to infrastructure, the recurring issue of infrastructural delay was still evident as many businesses struggled to survive in the year. Government effort both at the Federal and State levels in this critical area was not too impactful.

Our roads are now in such a sorry state that to deliver goods to our depots and esteemed Distributors take longer days and at a very high cost.

"Also, the Government through its Ministries and Agencies introduced some policy measures in the year 2018 which negated the Policy on "Ease of Doing Business". These include the upward review of Excise Duty on Alcoholic Beverages and Tobacco Products and the planned ban on production of alcoholic drinks in sachets and small size PET bottles.

All these coupled with multiple taxation and high interest rates constituted serious threat to the existence of our business. We will however continue to engage the relevant Government Agencies and Ministries on these issues," he added.

Trade partners reward, re-launch

Beyond advertising and marketing, all the players have consistently invested in reward scheme to strengthen relationship with distributors and consumers. In spite of the challenges facing the industry, IDL, according to its MD has worked hard to ensure that the company's products are always available and Customers' complaints promptly resolved at all times.

Again, to sustain loyalty of its patrons, the company recently held her annual Distributors awards and the relaunch of its alcopop Brand Teezers.

The Head of Sales, Mr. Hope Gbagi, in an interview disclosed that a total of more than three hundred and twenty-five million naira was given out as rewards to the Distributors. He also added that Intercontinental Distillers Limited will fly 13 of their top Distributors and their spouses to Dubai as a way showing further gratitude for the hard work, they put in the business in year 2018

Managing Director of the company, Patrick Anegbe, had earlier appealed to the Federal Government to review downward, excise duties for Wines and Spirits. He also lamented the bad infrastructure, especially roads linking major cities. He said the current state of the roads have become a hindrance in the distribution of products and goods across the nation.

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