Food union employers to relocate factories over outrageous excise duty, taxation

Employers of labour in the food and beverage sector have concluded plans to leave Nigeria and relocate their factories to neighbouring West African countries over alleged outrageous excise duty on carbonated drinks and multiple taxation by the Federal Government.

The employers, who called on the Federal Government to take urgent action to save the business environment from collapsing, said relocating their factories to neighbouring countries was the next line of action, where production cost is lesser and the finished products will be brought back to Nigeria to sell, making Nigeria to be at the receiving end.

This was disclosed by workers under the umbrella of the National Union of Food Beverage and Tobacco Employees (NUFBTE), revealing the employers’ plans in separate letters to the Speaker, House of Representatives, Femi Gbajabiamila; Minister of Labour and Employment, Chris Ngige, and President, Nigeria Labour Congress (NLC), Ayuba Wabba, titled, ‘Federal Government Save Our Soul, Food Sector is Dying because of Multiple Excise Duty /Taxation’.

The union said the introduction of the excise duty has crippled the business since January this year till date.

The letters signed by President of NUFBTE, Lateef Oyelekan, called on the Federal Government to save the sector from extinction as the 10 per cent excise duty placed on carbonated drinks and excess taxation has caused the sack of over 5,000 employees in the last eight months.

Oyelekan said all the facts given by the union could be verified from the Customs officers deployed to each food factory.

According to the NUFBTE president, finished products in companies are being discarded because of their expiration and lack of purchase from customers because of product price increase.

He said: “The life span of finished products (FCMG) is six month. Over billions of products have expired and will be discarded because of the price increase of the finished products.

“Billions of naira raw materials of the products will be expiring in December and January. The production of goods daily that was formerly 12 hours per day, six days a week (Monday to Saturday) has now reduced to eight hours per day and three times a week.

“Companies that have six production lines have shut three lines down and most companies are now left with three lines to produce due to the excess percentage on excise duty and taxation. Companies are struggling to produce.”

The letter read further, “Having said that, in the past years companies like Nigeria Bottling Company, Nigeria Breweries Limited, Nestle, Seven Up Bottling Company, International Breweries, Nigeria Flour Mills to mention a few engaged Technical school holders, GCE holders, OND holders, HND holders and train them in the company’s technical training college for a year, after which they were employed. This is not the case again in recent times.

“Furthermore, each of the aforementioned companies employed close to 1000 workers in the past years, but sadly this exercise has stopped in the past two years due to the outrageous excise duty and taxation affecting the sector.”