Labour Raises the Alarm over Influx of Smuggled Drinks

28 Nov 2012

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  Labour Minister, Emeka Wogu

Stories by Linda Eroke
Workers in the food and beverage sector have raised the alarm over the influx of smuggled wines and spirit into the country, stating that the practice has eroded the competitive strength of local manufacturers.

Besides, they claimed that a sizeable number of imported brands particularly from Asia, India, South Africa and Europe find their way illegally into the Nigerian market through the nation’s porous borders, adding that the products are sold and advertised freely without proof of registration and payment of appropriate duties and charges.

Speaking under the umbrella of National Union of Food, Beverage and Tobacco Employees (NUFBTE) the union alleged that over 80 per cent of wine and spirit that find their way into the Nigerian market are not registered by National Agency for Food, Drug Administration and Control (NAFDAC).

National President of the union, Mr. Lateef Oyelekan, told journalists that the influx of these products was threatening the survival of the two local wine and spirit distilling companies, which, he said, were on the verge of collapse.

Oyelekan said the affected employers are threatening to embark on massive disengagement of workers due to the dwindling fortune and market share of the local players. He said there are currently 48 brands of these products, which are sold at relatively cheap prices because the importers do no pay import duties and levies to the appropriate agencies of government thereby undermining the economic development of the nation.

“Management of Nigerian Distilleries Limited, Sango Otta, Ogun State, and Intercontinental Distilleries Limited, who both employ close to 4,000 direct jobs, are threatening to lay off workers because of hostile and unfavorable operating environment.

“Both companies had since the past three years been battling unfair competition with smuggled foreign brands whose importers do not pay any tax or levy to government, but undermining the economic development of Nigeria.

“The spirits industry ranks among the oldest and still surviving sectors of the economy, providing gainful employment to thousands of Nigerians in a country that has been struggling to meet the basic needs of our largely impoverished population. However, in the last three years, the playing field in the spirits landscape has become ominously uneven, thanks to the influx of cheap imports mainly from Asia that are brazenly being smuggled and dumped into the largely unprotected Nigerian market.

“Apart from Nigeria having been turned into a dumping ground for these products, there is also the health implication of these unregistered products to the Nigerian consumers as increasing cases of faking and re-labeling of expired products have also been uncovered,” Oyelekan said.

Speaking further, he said the recent development has led to unfair completion by foreign players, especially at the mainstream segment which used to be the preserve of local manufacturers. This, he said, have eroded the competitive strength of local manufacturers who are made to pay all duties, relevant excise levies and taxes and are therefore disadvantaged in competing on price versus smuggled imports.

The union president therefore called on the Federal Government to intervene before the collapse of the food and beverage industry.

“We do not want what happened in the textile industry, which has now been brought to its knees to happen to our sector. We are appealing to our law enforcement agents especially the customs, to live up to expectations and save the Nigerian economy and the food beverage sector from the hands of economic saboteurs and smugglers. We are equally calling on the Federal Government to ban the importation of food beverage and confectionaries into the country because the local manufacturers have the capacities to not only supply the Nigerian market, but also the whole West African sub region,” he added. 

Tags: Nigeria, Featured, Business, NAFDAC, Smuggled Drinks

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