Chelsea, Orijin, others to lose revenue to Nigerian govt’s alcohol policy

The revenue generation companies producing alcoholic drinks like Chelsea, Orijin among others will drop in the next two years, as President Muhammadu Buhari’s administration seeks to phase out sachet and small PET bottle products.

Producers of alcoholic drinks in sachet packs, as well as PET and glass bottles with 30% ABV (alcohol by volume), have already began to cut production in line with directive from government agency, National Agency for Food and Drug Administration and Control (NAFDAC).

The reduction in output is pegged at 50%, resulting to unavailability of such products produced by various brands including DeRok, Action Bitters and Squadron in the market.

Ripples Nigeria had reported in February 2019, that the government was trying to cut consumption of alcohol within Nigeria, and Director-General of NAFDAC, Mojisola Adeyeye, reiterated this decision in a statement on Monday.

Adeyeye said companies that registered for the production of sachet packs, PET and glass bottles with 30% ABV prior to the policy have until 2024 to do away with the products in focus.

Also, promoters behind newly registered alcoholic brands with 200ml volume, have been given the opportunity to re-register for free in order to conform with the policy.

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What this means for alcoholic companies and employees

Turnovers from the sachet and small PET plastic and glass bottle is expected to plummet, hurting the finances of Chelsea, Orijin, Seaman, DeRok, Action Bitters and Squadron, especially if they are unable to meet the phase out deadline.

There is also the fear factor that the policy could affect employees in the factories where these products are produced, as workers in the sachet and PET bottles could become redundant if their company is not willing to scale up production in other segment.

The policy will also affect informal jobs at the local bus parks and streets, as many traders are involved in the retail sales of these alcoholic brands.

However, the policy has its good, as it reduces alcoholic consumption among drivers who are one of the factors driving the demand of the sachet and small PET bottles, resulting to reduction in accident induced by intoxication on the road.

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