Sugar Tax, Inflation Force Soft Drink Manufacturers to Raise Prices

Sugar Tax, Inflation Force Soft Drink Manufacturers to Raise Prices

  • Manufacturers of soft drinks have begun the implementation of the sugar tax contained in the 2021 Finance Act
  • The tax saw the manufacturers pass on the cost to consumers who complained about the price increase
  • Many sellers and consumers complain that the price hike will discourage consumers and retailers

Three months after implementing the federal government’s N10 per litre excise duty on all non-alcoholic, carbonated and sweetened beverages, soft drink manufacturers have devised coping mechanisms, including an increase in prices.

According to reports, despite initial opposition against the policy in the 2021 Finance Act, the concerned manufacturers have placed the additional cost on consumers by increasing the prices of their products and have begun remittances to the federal government.

Sugar, Soft Drinks, Price Increase
Soft drink manufacturers increase prices Credit: andresr
Source: Getty Images

Market survey shows huge price increases

The policy started on June 1, 2022.

Read also

Britain unveils anti-inflation budget as recession looms

PAY ATTENTION: Subscribe to Digital Talk newsletter to receive must-know business stories and succeed BIG!

The sugar tax affects soft drink makers, including Nigerian Bottling Company, Nigerian Breweries, Rite Foods, and others.

A market survey by shows that retail markers have increased their prices by more than 33 per cent in the last three months.

A 50cl PET Coke, Pepsi, Sprite and others sold for N150 are now sold for between N230 to N250, while a 33cl malt drink is sold for between N250 and N350.

The retail market survey shows a spiked inflow of 35cl drinks from Rite Foods and Coca-Cola brands sold for N100 as cheaper choices for consumers.

In January, the Nigerian government slammed an N10 per litre excise duty on all non-alcoholic, carbonated and sweetened beverages in a desperate move to increase revenue.

Retailers and consumers complain

Minister of Finance, Budget and National Planning Zainab Ahmed announced the policy and said that despite the anticipated revenues, the tax seeks to discourage excessive sugar consumption in beverages, contributing to debilitating diseases like diabetes and obesity.

Read also

US Fed raises key interest rate as recession fears mount

Nigerians have reacted to the increase in the price of soft drinks, saying it will pile unnecessary pressure on Nigerians as most of them could afford them before the ban.

Olumide Ijora, a mechanic, said he was shocked when he heard that the prices had spiked.

Ijora said:

“I do not understand why the price will go up like that and what the people will do.”

A retailer, Elizabeth Umar, told that she got wind of the price increase early in September and prepared herself.

She said:

“As it is now, I am not sure if I should continue with the sales. Customers are not coming as before. Even with the last price increases, sales were very low. I wonder how they will respond now when increases come into effect.”

Coke, Pepsi, other soft drinks to sell for N250/50CL following N10 Tax imposition by FG reported that following the imposition of excise duty of N10/ per litre on soft drinks, depot owners, dealers and retailers have said they have no choice but to increase their prices, can authoritatively reveal.

Read also

Asian traders resume selling as another jumbo Fed hike looms

In a market survey conducted by, many of those who responded said if the new tax regime comes into effect, they will accordingly increase their prices.

Also, manufacturers have said they will comply with the new tax regime by the Nigerian government.


Online view pixel