Excise duty on carbonated drinks: Over 5,000 workers out of job in 8 months

By Bimbola Oyesola,                       [email protected]

Workers in the food sector of the economy on Friday called on Federal Government to save the sector from extinction as the 10 per cent excise duty placed on carbonated drinks has caused over 5,000 workers to be thrown out of employment in the last eight months.

The workers, under the umbrella of the National Union of Food Beverage and Tobacco Employees (NUFBTE), in separate letters to the Speaker, House of Representatives, Honourable Femi Gbajabiamila, Minister of Labour and Employment, Senator Chris Ngige, and the president, Nigeria Labour Congress (NLC), Ayuba Wabba, titled, “Federal Government Save Our Soul, Food sector is dying because of multiple excise duty/taxation,” the union said the introduction of the duty has crippled the business from January 2022 till date.

The Federal Government imposed 10% water taxation on carbonated drinks in the food sector last year.

In the letters signed by the president of NUFBTE, Lateef Oyelekan, the union lamented that it has lost over 5,000 workers on redundancy exercise due to excess taxation.

He said, “The lifespan of finished products (FCMG) is six month; billions of products have expired and will be discarded because of the price increase of the finished products.

“Raw materials of the products will be expiring soon, probably in December or January, which costs billions of naira. The production of goods daily, which was formally 12 hours per day, six days a week (Monday to Saturday) has now reduced to eight hours per day and three times a week.

“Companies that have six production lines have shut three lines down and most companies are now left with three lines to produce due to the excess percentage on excise duty and taxation. Companies are struggling to produce.”

Oyelekan said all the facts given by the union can be verified from the Customs officers deployed to each food factory. According to the NUFBTE president, finished products in companies are being discarded because of its expiration and lack of purchase from customers because of products price increase.

The letter read further, “Having said that, in the past years companies like Nigeria Bottling Company, Nigeria Breweries Limited, Nestle, Seven-Up Bottling Company, International Breweries, Nigeria Flour Mills, to mention a few, engaged technical school holders, GCE holders, OND holders, HND holders and trained them in the company’s technical training college for a year, after which they were employed. This is not the case again in recent times.

“Furthermore, each of the aforementioned companies employed close to 1,000 workers in the past years, but sadly this exercise has stopped in the past two years due to the outrageous excise duty and taxation affecting the sector.”

He stated that employers are planning to relocate their factories to neighbouring Africa countries where production cost is lower and the finished products will be brought to Nigeria to sell, harping that Nigeria would be at the receiving end.

“We are hereby appealing to the Federal Government for immediate urgent action for the sake and future of Nigerian youth and Nigeria as a nation,” he said.