By Dipo Olowookere
There are strong indications that the management of Nigerian Breweries may soon force its consumers to pay more for a bottle of beer produced by the company.
In recent times, the brewery giant has been struggling to cope with the harsh operating environment as a result of an increase in the excise duty on alcoholic products by the federal government last year.
Last month, the company released its financial statements for the first quarter of 2019, though the revenue increased to N91.4 billion from N88.5 billion in the same period of last year, the profit before tax depreciated to N11.5 billion from N15.3 billion, while the profit after tax went down by 21.6 percent to N8 billion from N10.2 billion a year ago.
During the period, the company announced that it paid N8.1 billion on excise duty compared with the N5.5 billion in Q1 2018, bringing its net revenue in the period under consideration to N83.3 billion versus N83 billion a year ago.
Worried by the impact the new excise duty was having on the business, the firm said it was making moves to offset to these effects through raising prices of the company’s products.
This is especially because the management expects excise duties to increase in the second half of the year by 67 percent to N35 per litre.
As a result of this, “We need to increase prices to compensate for inflation pressure and the impacts of excise tax,” Managing Director Jordi Borrut Bel was quoted as saying by Bloomberg on Tuesday in Lagos.
Business Post reports that there was allegedly an earlier plan by the beer maker to increase prices of its products in 2018 after the new hike in excise duty became effective, but the reluctance of its competitors to toe a similar path killed it.
Shares of Nigerian Breweries fell by 50 kobo or 0.76 percent on the Nigerian Stock Exchange (NSE) on Wednesday to finish at N65.50k per unit.
