Why prices of carbonated drinks are increasing in Nigeria

Since June 1, 2022, retail prices of carbonated drinks, especially those being sold in pet bottles, have spiked by 33 per cent. Thanks to the re-introduced tax on non-alcoholic, carbonated and sweetened beverages. The policy levies N10 excise duty sweetened beverages. The tax, recently included in the Finance Act 2021, drew opposition from the Manufacturers Association of Nigeria (MAN), among other concerned bodies. Despite, the controversial tax took effect.

In its defence, the government said the policy aimed at reducing individual sugar consumption while preserving the health of Nigerians. The pro-health tax revenue, as said by the authorities, would be deployed into fighting the spread of non-communicable diseases.

Moreover, the government argued the tax was not new, as it initially existed between 1984 and 2009.

Some civil society organisations, under the auspices of the National Action on Sugar Reduction (NASR), applauded the policy, but manufacturers fear its ripple effects on the sector. Some of these, they say, are rise in production cost, increase in price of carbonated drinks, and likely job loss.