Business
Beer market booms, as Misery Index drives profitability
Adebayo Obajemu
The economic crunch, growing insecurity, uncertainties over what the future holds for households and individuals have together with other unwholesome variables created deep psychological trauma, such as depression, frustration and a sense of hopelessness, which has induced a growing escape into alcoholism.
The worsening economic and social challenges in the country seems to directly or otherwise produced a corresponding growth in the number of Nigerians consuming alcoholic beverage, and the quantity of the drink being consumed. Before now there had been the fear over the survival of the alcoholic items, particularly, beer, see
In a survey by Business Hallmark which entailed visits to drinking joints and relaxation centres across Lagos metropolis revealed a surge in the patronage.
There is no better explainer of the frustrating feelings of Nigerians with their lives induced by economic difficulties than the spike in the Misery Index which jumped from 59.4 per cent in December 2021 to 62.79 by July this year, according to the National Bureau of Statistics.
Incidentally, and by a stroke of irony, what has turned out to be misery and depression for others has become a bumper harvest for beer makers in the first six months of the year. The depression has given rise to a spiral in the booze culture.
Dr. Abolarin Oladapo, a sociologist told Business Hallmark that “There’s a striking correlation between a spike in the Misery Index and a corresponding upward movement in the drinking culture. One feeds the other, and the more depressed one is, the more and the stronger the drive to escape from it through momentary pleasure such as seeking company and taking to bottles.”
Not withstanding the rising inflation which has fed into growing frustration among the majority of Nigerians, the statistics from the NBS has revealed a bleak pattern of consistent and steady increase in beer consumption, resulting in higher profits by breweries and bumper revenue for the government.
It is no longer a secret that virtually all the other sectors of the economy are struggling for survival given harsh economic realities. But the story is different for breweries.
In an investigation undertaken by, an online news platform which collated data from the first quarter results of four major brewers in the country, there’s an increase in profitability of the four brewers. According to the figures, Nigerians drank beer worth N599.11 billion in six months running from January to June 2022.
It was not only the brewers alone that smiled to the bank, about N68 billion was collected in form of Excise Duty on beer by the Customs Service between January and June.
Observers are worried that the rising misery level and the harsh economic climate, government’s harsh duty on local manufacturers of beers might making business difficult for them.
Recall that the federal government introduced a new excise regime in 2018 to address shortfalls in revenues; the new regime led to an increase of at least N30 per litre of alcohol consumed in the country.
Another increase to N35 per litre was implemented in June 2019. With another adjustment imminent, operators are already concerned about their survival, especially as inflation continues to make nonsense of chunk of individuals’ real incomes, limiting household spending.
The government is accused of ignoring the peculiarity of her economic operating environment amid inflationary pressure, dwindling income growth, weak naira, and struggling economic growth, among others, which makes the survival of companies and households threatened, hence, the timing of such policy is considered by experts, a bad one.
The excise duty is levied on the manufacture, sale, and consumption of goods that fall under the excise control, which include but are not limited to beer, spirits, alcoholic beverages, tobacco, and cigarettes, which are collected across the country.
Findings by this medium has shown that beer makers are no longer interested in struggling for market share as they are concentrating on improving their profitability and upping their financial performance across board.
It should be noted that there has been increase twice in the prices of beers between 2019 and 2021, due to high excise duty, a levy on the manufacture of locally produced goods.
Business Hallmark learnt that for International Breweries, like other brewers, it has been a bumper harvest as it generated N111.40 billion within six months of H1 this year, in contrast to the N81.96 billion grossed in the same period last year – a difference of 35.9%.
Its net profit recorded a -97.5% decline, after failing to surpass the N13.88 billion profit after tax of H1 2021, as the firm reported a N336.20 million net profit in the first half of this year.
On its own, Champion Brewery which has a very slim market share posted the highest revenue growth of 41.6% during the period under review, making it the best performing firm in the industry. It generated N6.86 billion, against the N4.84 billion reported in H1 2021.
Guinness Nigeria reported 28.9% turnover growth, which rose to N206.82 billion in H1 this year, from N160.41 billion in H1 2021. It nevertheless recorded the highest growth in profit after tax, as it closed the first half of this year with N15.65 billion, which is 1146.7% year-on-year growth when compared to the N1.25 billion of H1 2021.
As for the Nigerian Breweries, which grew its revenue to N274.03 billion between January to June this year, the 30.9% growth rate when compared to the N209.21 billion turnover of H1 last year, makes it the third best performing firm in the market.
It reported profit growth of 142.8% year-on-year, having declared a N19.08 billion profit in the first six months of 2022, surpassing the N11.22 billion profit after tax of H1 2021.
Dr. Banji Lawal, a psychologist said the growing pointlessness of every day life of average Nigerian humbled on all fronts by misery induced by spiralling inflation, unemployment, difficult living conditions, poverty have all led to booze culture.
Reports lately have confirmed that the greatest number of Nigerians are living in abject poverty with no hope of where their next meal will come from on a daily inflation according to official figure, poverty has risen to 19.6 per cent, the highest in 17 years.
The latest figure from NBS showed that millions of adults and youths are jobless, streaming the streets in search of jobs. In the data, 60 per cent of the unemployed Nigerians is between the age brackets of 15 and 35. Many of them, are university graduates.
Nigeria’s inflation rate in July 2022 jumped to a 17-year high of 19.64%, compared to 18.6% recorded in the previous month of June 2022.
This figure is from inflation data recently released Consumer Price Index (CPI) report for July 2022, by the National Bureau of Statistics (NBS).The last time Nigeria’s inflation was above 19.64% was in September 2005 when it rose to 24.32%.
Muyiwa Adejobi, a civil servant told Business Hallmark that ” These days I’m becoming ‘irresponsible’ to my wife,but that’s not so. If I go home early there will be unnecessary demand on me from the unnecessary to the necessary.
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“Before I used to take one bottle but these days I take two to relieve tension and spend more time chatting with people. That gives me momentary happiness.”
Bisola Adegbenro, a house wife said ” My husband always gives one or two excuses for his late night habit. It is either the job is too much or they are given a deadline to meet. But I know that he’s somewhere drinking. Can that take away the economic crunch?”.
Yetunde, owner of a beer parlour at Agege told Business Hallmark that ” Since March I have witnessed steady increase in sales. I listen to the tales of woes and hardships experienced by my customers, and I know that it is to escape depression that they are streaming to my joint.
“I sympathize with them but inwardly I’m happy because the situation translates to increased sales for me”, she said.
Dr. Lawal said unless the economic situation improves, the booze culture will continue, and the country will witness an upsurge in mental illness and troubled psychological conditions.
