Heineken Nigerian Unit to Raise Prices as Taxes Seen to Jump 67%
(Bloomberg) -- Heineken NV’s Nigerian unit plans to raise prices this year to offset a sharp increase in taxes.
Nigerian Breweries Plc expects excise duties to jump about 67 percent to 35 naira ($0.10) per liter in the second half of the year, as the government phases in tax increases on alcoholic beverages, Chairman Kolawole Jamodu said a statement handed to reporters.
“We need to increase prices to compensate for inflation pressure and the impacts of excise tax,” Managing Director Jordi Borrut Bel told reporters Tuesday in Lagos, the commercial capital.
Read a related article about the outlook for Nigerian Breweries
Nigerian authorities raised taxes on beer and spirits last year to boost income as a decline in the price and output of crude, the West African nation’s main source of income, has seen revenue fall below targets in the past three years.
The Lagos-based company signed an agreement with CrossBoundary Energy to supply 650 kilowatts of solar power to its plant in Ibadan, in the southwest of the country to replace more expensive diesel generators, Bel said. Solar power will also be installed at its Lagos brewery and other plants “if it’s successful at Ibadan,’’ he said.
The nation’s biggest brewer sources 57 percent of its raw materials locally and plans to increase that to 60 percent by 2020, Bel said.
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