Nigerian Breweries Warns Tax Stamp Plan Could Wipe Out Profits

The chief executive of Nigerian Breweries has warned that Nigeria’s planned tax stamp system for excisable goods could erase as much as 100% of profits in the brewing industry and put jobs, investment and government revenue at risk.

Thibaut Boidin, the managing director and chief executive of Nigerian Breweries Plc, said the measure would add costs to a sector that he described as having little or no illicit production problem. He made the remarks in Lagos during the company’s 80th pre-annual general meeting media briefing, where he argued that the industry needs stable policy conditions to keep investing and growing.

A tax stamp is a tracking label or digital code that governments use on products such as alcohol, tobacco and sugary drinks to show that excise taxes have been paid. Governments often adopt the system to fight smuggling, counterfeiting and illegal production. Boidin said those concerns do not justify the policy in Nigeria’s formal beer market.

“Tax stamp is a way to control illicit production,” he said. “It has been announced that a tax stamp will be implemented in Nigeria. This applies to manufacturers that are impacted by a lot of illicit production. Here, it is zero illicit production.”

He said Nigerian Breweries had calculated that if the policy is applied to beer makers, the effect would be severe enough to wipe out profits across the industry. “The impact is a 100% decrease in the profits generated by the industry. We made a calculation, it is huge,” he said.

Boidin also warned that the policy could reduce tax receipts rather than increase them if it weakens legal producers. “It means for the government, zero revenue from where we are today. It means also that the full industry will collapse,” he said.

He said as many as 3 million direct and indirect jobs tied to the brewing sector could be affected if production falls sharply. His comments came as Nigerian Breweries reported a return to profitability after a difficult year marked by inflation, foreign exchange pressure and weaker consumer spending.

The company said pre-tax profit rose to N161.06 billion in 2025, compared with a N182.9 billion loss in 2024, helped by stronger sales and tighter cost control. Revenue climbed 35.32% year-on-year to N1.5 trillion, with local sales accounting for almost all of its volume. Gross profit rose to N565.1 billion from N319.9 billion a year earlier.

Boidin said the broader business environment remained difficult despite some improvement in macroeconomic stability in 2025. He pointed to foreign exchange dependence, high inflation and weak purchasing power as continuing pressures on beer consumption.

“It’s not a secret that we’re operating in a very volatile environment, a very complex environment,” he said. “Although in 2025, we can all recognise that the macroeconomic environment was a bit more stable than in the previous years, we remain dependent on FX, and purchasing power remains under pressure.”

He also said recent government reforms, including foreign exchange harmonization, fuel subsidy removal and tax changes, had created short-term volatility for manufacturers.

The brewing industry’s objections reflect wider concern among manufacturers over the planned tax stamp system. Industry groups have argued that adding another layer of compliance costs could hurt formal producers without meaningfully improving tax collection or enforcement.

Nigeria’s customs chief, Adewale Adeniyi, has met with stakeholders about the plan, but the government has not announced when implementation would begin.