Coke, Pepsi, Other Soft Drinks to Sell for N250/50CL Following N10 Tax Imposition by FG
- If the proposed imposition of N10 excise duty comes into effect, it will drive up the price of soft drinks in Nigeria
- Wholesalers, retailers said they will comply immediately with the price if the Nigerian government goes ahead to implement the directive
- Analysts also said the policy cause inflation as the Nigerian Labour Congress said it will drive up hunger in the country
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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, Legit.ng can authoritatively reveal.
In a market survey conducted by Legit.ng, 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.
Source: UGC
Chinyere Onyekachi, a depot owner in the Ogba area of Lagos, who spoke exclusively to Legit.ng said they are waiting anxiously for the new directive to take effect.
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She said:
"It is not that we are happy that the prices of soft drinks will go up, if, for anything, it will affect sales. I know people who cannot afford them at the current price. Now, what happens when the cost is increased?
She mentioned that the policy is obnoxious as it is not in the prerogative of the government to control what people consume as long as they can afford it.
Chineye said:
"I heard that the reason they want to increase the price is so that people won't get obese and become diabetic. But I think that's not true. This government is looking for money from everyone and everywhere to service debts."
A retailer in Ikeja, Anuoluwa Emmanuel told Legit.ng that she might consider stopping the sale of soft drinks altogether if the tax becomes effective.
The reason, she said, is because, at the present cost, it is hard to exhaust sales faster than before.
She said before the price became N150 per 50CL, she could sell close to 60 packs of plastic drinks within four days but struggles to sell 15 in seven days.
Emmanuel said:
"I will have no reason to continue to sell the products if the price is increased. I am presently struggling to finish a few packs. What will happen if the tax they're talking about takes effect?"
When pressed about the possibility of increased profits, the mother of three said there is no way there would be profit because right from the manufacturers, the retail price would have been determined.
She said the policy will have negative effects on the population.
She said:
"Imagine that I have N250 on me for launch. Presently, I can afford a snack of N100 and a bottle of soft drink for N150. But if the cost goes up, I will have to spend the entire money buying a soft drink alone. That is nonsense."
It will drive up inflation
Kelechi Orji, a policy analyst and a brand journalist told Legit.ng that the policy is wrong. He said it will increase hunger and drive inflation to an all-time high.
Orji said the Nigerian economy is fragile and responds very awkwardly to any price increase.
Orji said:
“The economy is sensitive. Very sensitive to a price increase. It's going to be a ripple effect. Everything will be affected."
Labour reacts
Labour unions in Nigeria have asked the Nigerian government to rethink the proposed tax.
The Nigerian Labour Congress (NLC) said that the policy will accelerate hunger in Nigeria because those who depend on soft drinks to squelch immediate hunger will no longer have the means to do so.
Manufacturers react
Legit.ng has reported that the Manufacturer Association (MAN) has called on the federal government to reconsider its plan to introduce N10 per litre excise duty on carbonated, and non-alcoholic drinks.
MAN stated in a paper titled "Key Considerations Against Excise on Non-Alcoholic Beverages" that the proposed law would be unproductive and would result in income loss for the government, ThisDay reports.
According to MAN, between 2022 and 2025, the federal government may earn N81 billion from excise duty but lose N197 billion from other taxes, like Value Added Tax and Company Income Tax from soft drink makers.
Source: Legit.ng
