Sugar Tax May increase pressure on manufacturers — LCCI

By Yinka Kolawole

The Lagos Chamber of Commerce and Industry (LCCI) has expressed concern that the proposed Sugar-Sweetened Beverage (SSB) Tax Bill passed by the Senate could increase costs for manufacturers and consumers.

In a statement on Monday, the Director-General of the LCCI, Chinyere Almona, said while efforts to address public health concerns linked to excessive sugar consumption are important, policy measures should be designed to avoid placing additional strain on businesses and consumers.

Almona noted that manufacturers are already contending with challenges such as high energy costs, exchange-rate volatility, elevated interest rates, logistics constraints, multiple taxes and weak consumer purchasing power.

According to her, additional taxes on beverage manufacturers could raise production costs, which may be reflected in higher consumer prices.

“This may contribute to inflationary pressures and affect demand for locally manufactured products,” she said.

She also noted that the policy could have implications for businesses and individuals connected to the beverage industry, including suppliers, distributors, transport operators, retailers, farmers and service providers.

Almona said a reduction in production volumes could potentially affect investment levels, capacity utilisation and employment within the sector.

She advocated a broader approach to addressing public health concerns, including public education campaigns, voluntary product reformulation, improved product labelling, consumer awareness initiatives and stakeholder engagement.

According to her, experiences in some countries suggest that similar policies have been used to encourage manufacturers to reduce sugar content in their products.

Almona said Nigeria’s SSB tax framework should form part of a wider public health strategy and be implemented in a way that minimises disruption to industry and employment.

“We want to see manufacturers reformulate their products over a transition period rather than simply raise prices due to SSB taxes,” she said.

“A reformulation-focused tax may be more effective than a revenue-focused tax because it can help achieve public health objectives while supporting industrial activity.”

She called on the Federal Government and the National Assembly to engage manufacturers, health experts, private-sector groups, consumer associations and other stakeholders in further discussions on the policy.

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