NLC Kicks Against New Excise Duty On Alcohol

The letter signed by its president, Comrade Ayuba Wabba was copied to the Chief of Staff to the President and Commander-in-Chief, Federal Republic of Nigeria and Director General, State Security Service, DSS. The letter read in part: “While NLC commend and support the laudable efforts of government in increasing revenue and diversifying the economy in order to meet its obligations to the people, which is already yielding positive results, we however observe that the Federal Government’s recent policy of 500% increase in tariff on locally produced alcohol, spirits and tobacco will be counter-productive. This policy will eventually lead to job losses and possible re-location of affected companies to neighboring African countries as was the case with Dunlop and Michelin. NLC said based on reports and observations from industry key players, the astronomical increase in tariff will lead to huge price disparity between locally produced alcohol, tobacco and spirit and the ones produced outside Nigeria or imported. It added that it will also increase the cost of production and reduce profit margin. It will also lead to the closure and possible relocation of those industries to neighboring countries within the West African sub region. It said, “We also wish to draw the attention of the Honourable Minister to the threat that the current hike in tariff on locally produced alcohol and tobacco poses to Nigeria’s position as the choice investment destination in the food, and tobacco industry in Africa. Currently, the British American Tobacco Company (BATC) has its largest manufacturing concerns in Nigeria and actually services other markets in the sub-region from Nigeria. The leadership of our union in the sector, NUFBTE, has been informed by manufacturers in the sector that they are seriously considering moving their businesses elsewhere if government goes ahead with the current hike in tariff. The BATC which retains its highest manufacturing presence in Nigeria is seriously considering moving out a significant portion of its production lines out of Nigeria to other African countries. Also, many distiller companies, and Guinness Breweries which invested billions in distilling have decided to divert investments running into billions of naira to other neighboring African countries.]]>