NAFDAC: One Ban, Too Many

The House of Representatives last week joined the call for NAFDAC to lift its ban on alcoholic beverages in sachets and small pack volumes to save over N100 billion investments and jobs, writes Dike Onwuamaeze

What has manufacturers’ marketing strategy to make their products accessible and affordable to their final consumers got to do with a draconian regulatory position? This is the question agitating the minds of stakeholders and investors in alcoholic beverage segment of the Nigerian industrial sector ever since the NAFDAC slammed a ban on the packaging and sale of alcoholic beverages in sachets and bottles less than 200 milliliters. 

On February 5, the National Agency for Food and Drug Administration and Control (NAFDAC) announced what it called “Enforcement Activities to Enforce Ban on Production of Alcoholic Beverages in Small Pack Volumes of 200ml and Sachets.”  

The announcement, according to NAFDAC, expected manufacturers to stop the production of these products in sachets and small pack volumes effective from January 31, adding that it is committed, “to ensure that the validity of renewal of already registered alcoholic products in the affected category does not exceed the year 2024.”

It should be stated clearly that these alcoholic beverages are legitimate products that are approved by NAFDAC. The bone of contention is that they are being packaged for sale in smaller quantities, which is purely a marketing strategy that resonated with the current low purchasing capacity of Nigerian consumers.

It is also a strategy being adopted by manufacturers of household consumables like toothpaste, milk, detergents, ice cream, tomato paste etc.

Since making this announcement, NAFDAC has remained adamant and unwilling to change its position. Not even the reasoned arguments of the Manufacturers Association of Nigeria (MAN), Nigeria Employers Consultative Association (NECA) and the Distillers and Blenders Association of Nigeria (DIBAN) could dissuade NAFDAC that the path it has embarked on would be disastrous to investors who have committed hundreds of billions of Naira and cause workers in that sector to lose their jobs.

House of Reps intervenes

Last week, the House of Representatives called on the NAFDAC to urgently lift the ban placed on the production and sale of alcoholic drinks in sachets and 200ml pet bottles.

The House expressed the view that the timing of the ban was inappropriate considering the current economic conditions, staggering unemployment, soaring inflation and high rate of poverty level in the country.

It pointed out that the ban of sachet alcohol should be replaced with the establishment of licensed liquor stores/outlets in local government areas across the country and making it unlawful to send under-age persons to purchase alcoholic beverages.  

The House added: “Government regulatory bodies should place more emphasis on regulation, monitoring and enlightenment campaigns to educate stakeholders and the general public on the dangers of under aged consumption of alcohol and its sales in motor parks.

“Enlightenment campaigns should be carried out in secondary schools across the country, as practiced by the National Drug Law Enforcement Agency (NDLEA), to educate students on dangers and vices associated with the abuse of alcohol.

“Regulatory mechanisms should be strengthened to ensure enforcement and compliance and encourage legislation promoting recycling materials for green economy and minimising importation of raw materials used in producing pet bottles and sachets to conserve foreign exchange.”

MAN demands Priority Attention

Commenting on the NAFDAC’s ban, the President of MAN, Mr. Francis Meshioye, noted that Nigeria’s economy is in a dire state and urged policy makers to, more than ever before, be intentional about growing the manufacturing sector, adding that there is no country that is considered as developed that did not give priority attention to the manufacturing sector.

Meshioye said: “There is no gainsaying the fact that manufacturing is pivotal to galvanising and sustaining the economic growth and development of Nigeria. The government needs to come to the realisation that a win for the manufacturing sector is a win for the economy and by extension a better life of the citizenry.

“Government and its agencies should deliberately abstain from taking harmful and inconsiderate policies that lack adequate inputs of key player that would be affected. Permit me to make reference to two of such instances.

“Within the first two months of the this year, a ban was placed on single-use plastics and styrofoam packs by Lagos State Government and NAFDAC, in similar fashion, placed a ban on alcoholic beverages in pet bottles and sachet below 200ml.

“The former was done outside the timeframe set by the national policy and the latter based on unfounded assumptions; both without due consideration for the economic and social impact of those unwarranted decisions.”

He observed that the negative impact of these policies on the affected manufacturing industries as well as the huge number of workers whose jobs are on the line could not be overemphasised.

Additionally, it has become pertinent for government and the private sectors to work in tandem to revamp the ailing manufacturing sector, especially at this time, by exploring home grown policy initiatives that will address are peculiar challenges.

There is need to mobilise our local resources and more importantly, take deliberate steps to overcome the binding constraints that confront the productive sector. This has to be through frank conversations, effective collaboration and bold decision that radically depart from the norm.

It must be noted that the nation’s economic recovery is highly dependent on the deployment of policy stimulus supported with a synthesis of domestic growth, export focused and offensive trade strategies. This will promote resilience, steady growth and ensure that the sector gains meaningful traction going forward. As we move in this direction, we are confident that as our partners, you will join us in our advocacy drive to actualise a vibrant manufacturing sector.

NECA Decry Ban

The Director General of NECA, Mr. Adewale-Smatt Oyerinde, has described the ban as act of economic sabotage. Oyerinde said that it is myopic for NAFDAC to view the issue from solely health perspective.

He argued: “You cannot pick one issue in the economy because that issue has the potential to destroy or affect many other things.

“One issue is the ban on sachet alcohol. The NAFDAC has said that it is a health issue and decided to ban it. But you cannot look at the ban just from the perspective of health. There are some economic considerations that you have to bring in. 

“Like what happens to over N100 billion investments in that space? What happens to over 500,000 workers that industry that will lose their jobs?

“So, you might have sorted out the issue of health from one end but have created multi-dimensional problems for the economy. How are we going to accommodate the 500,000 people that might have lost their jobs? How do we compensate the investments that might have been lost?

“Moreover, you would have made the smuggling of those products in sachet packages attractive. We have many borders that the customs cannot sufficiently man. The regulated channel of tax that these businesses are paying cannot be collected from those smuggled products.

“So, it is a fatally wrong decision and that is why we have called it an economic sabotage, because you cannot take that decision without looking at its consequences for the whole of the economy.

“That is our perspective and how we think that government should look at all the issues that are currently bedeviling the organised private sector.”  

The Director General/Chief Executive Officer of MAN, Mr. Segun Ajayi-Kadir, also pooh-poohed the argument of NAFDAC. Ajayi-Kadir pointed out that Research Data Solution Limited that was engaged by NAFDAC submitted a report on August 20, 2021, which showed that only 3.9 per cent of underage were engaged in binge drinking. It recommended access control by the regulator rather than outright ban. “This, therefore, confirms the fact that involvement of underage in alcoholic consumption is low and could, with additional efforts, be eradicated,” he said.

Gaps in MOU

He further pointed out that in 2021, a ministerial committee set up a technical sub-committee made up of experts from the Ministry of Health and other relevant government agencies identified gaps in the MOU that NAFDAC relied on to impose the ban.

Some of the key issues identified by the sub-committee included among others that bans are generally ineffective regulation. It advocated for stronger collaboration between government agencies for better regulations.

The above, including a request to generate evidence were presented in a strategic plan to the immediate past Honourable Minister of Health, who then suspended the proposed ban pending the final report of the study by Cochrane Nigeria.

Yet, NAFDAC was fixated on banning the products in sachet and PET bottle 200ml packaging.

Ajayi-Kadir noted that the “key challenges we have had in implementing strategies to eliminate underage drinking in the country is the apparent preoccupation of NAFDAC to ban the production of drinks in sachets and PET bottles by 2024.

“This is at variance with the right of private entrepreneurs to invest and engage in legitimate business. Besides, the proposed policy would amount to a deliberate destruction of the business of local and indigenous investors who through thick and thin have kept faith with the Nigerian economy.”  

MAN hinged its argument for continuation of producing spirit drink in sachet 200ml PET bottle on the logic that smaller packaging is the surest way to ensure responsible and healthy consumption.

It said: “Small is good, if you buy small you will consume small. If you buy big you will consume big, this is not healthy. Bigger sizes encourage consumption of bigger portions, while small sizes encourage portion control.” 

It urged the federal government to reverse the ban immediately and replace it with regulations and access control. 

Only time would tell if NAFDAC would be swayed to toe the path of reason or not.