A study by the Oxford Economics for the Worldwide Brewing Alliance (WBA) which was released yesterday has revealed that Nigeria earned $2.294 billion through the sale of beer in 2019.

Also, the Minister of Industry, Trade and Investment, Mr. Adeniyi Adebayo, yesterday expressed the readiness of the federal government to support beer producers to keep them in business in the face of daunting challenges.

Nigeria was also ranked 30 out of 70 top global beer markets that were covered by the report, which was put together by Oxford Economics in January 2022, titled “Beer’s Global Economic Footprint.” The report obtained yesterday, revealed that 70 countries controlled 89 per cent of global beer sales.

The report which was described as the first-ever worldwide report to assess the beer industry’s global economic impact, found that one in every 110 jobs in the world was linked through direct, indirect, or induced impact channels to the beer sector.

It stated that the beer sector contributed $555 billion of gross value added (GVA) to global Gross Domestic Product in 2019, and helped governments around the world to generate $262 billion in tax revenue in the 70 countries it studied. This, it stated, accounted for 89 per cent of beer sold worldwide and supported an estimated 23.1 million jobs.

The Chief Executive Officer of Oxford Economics, Mr. Adrian Cooper, who presented the report during a webinar, said the beer sector was primed to contribute to post COVID global economic recovery as its economic significance is larger in faster-growing economies and is triggering substantial economic activities in the agriculture, distributive trade, and hospitality industry.

Oxford Economics asserted that the beer sector was important to economies all over the world and impacted all aspects of the beer value chain, from brewers, distributors, retailers, and the hospitality industry, to the suppliers each relied on.

Oxford Economics stated that,

the study relied “on 2019 data (instead of 2020). We demonstrate this because of the distortions caused by COVID-19. The effects of the pandemic mean that 2019 is more representative of a normal year for the beer sector.

It added that,

while making and delivering the beer people love, the activities of the beer sector sustain considerable amounts of GDP, jobs, and government revenue in economies around the globe.

Brewers and beer’s downstream value chain make important direct contributions, deliver substantial indirect impacts by buying goods and services from their suppliers, and induce further economic activity by paying wages and supporting wages along the supply chain.

Based on our detailed analysis across 70 countries, we estimate that, in 2019, the beer sector’s total economic impact amounted to $555 billion gross value added (GVA) contribution to global GDP, supporting 23 million jobs. In total, the beer sector supported 0.8 per cent of GDP across the 70 countries or $1 for every $131 of GDP generated in these economies in 2019.

To put that in context, the beer sector’s GVA contribution to global GDP is comparable with Belgium’s economy in 2019 ($533 billion) and the number of jobs supported is equal to the entire Italian labour force (23 million people).

The report stated that it was important to note that the economic significance of the beer sector was larger for lower-income countries.

It added:

While in high-income countries the beer sector contributed an average 0.9 per cent to national GDP, in low-income economies the equivalent figure is 1.6 per cent. Similarly, the beer sector supports a proportionally larger number of jobs in lower-income than in high-income countries (1.4 per cent vs. 1.1 per cent of national employment). The beer sector also supports significant tax payments for global governments.

Combined, we estimate that brewers and their downstream value chain made and supported $262 billion in tax payments to governments around the world. Of the total tax contribution, $109 billion are made up of VAT and excise duties paid on beer sales.

The President and Chief Executive Officer of the WBA, Mr. Justin Kissinger said:

While many previous studies exist for individual countries, none have ever attempted a rigorous, coherent estimate of the global impact with the same metrics at the same moment, nor have they fully considered elements of international trade like the importance of barley and hops from certain countries. What is apparent from the report is the positive role that beer plays in the economy.

Speaking in the same vein, the Chief Operating Officer of Americas for the IWSR Drinks Market Analysis, Ms. Brandy Rand, said the beer sector has been able to grow its market and experience a relatively better H1 2021 than spirits and wine but still remained behind its H1 2019.

Rand stated that,

no and low alcoholic beer is the most resilient and fastest-growing segment of beer as moderation trend solidifies.

Meanwhile, addressing representatives of the Beer Sectoral Group of the nation’s manufacturing sector yesterday in his office, led by the Managing Director of International Breweries, Mr. Hugo Pius Rocha, Adebayo was quoted in a statement to have said the government was fully aware of the challenges facing the manufacturing sector and was doing everything within its power to address them.

In his presentation to the minister, the secretary of the beer sectoral group, Mr. Tony Eneh had listed the challenges facing producers of beer to include devaluation, restricted access to foreign exchange, insecurity, escalating logistics cost, covid-19, ease of doing business, increasing excise duty, multiplicity of taxes and tax stamp.

He noted that despite the increase in the yearly taxes paid by the beer producers, their net profit had been on the decline due to the various challenges listed by them.

Eneh, therefore sought the support of the minister towards achieving excise deferment for year 2022 and beyond; support with ministerial engagements; access to foreign exchange; closer engagement between the Minister and the beer industry; and other support that may be deemed necessary.

Reacting, Adebayo said he was ready to offer support for the sector by engaging his colleagues on some of the issues raised in their presentations.

On the issue of forex, he said he had assurances from the Central Bank Governor that attention would be given to manufacturers using local raw materials in their bid to import machines for their use.

Justin Nwosu

Justin Nwosu is the founder and publisher of Flavision. His core interest is in writing unbiased news about Nigeria in particular and Africa in general. He’s a strong adherent of investigative journalism, with a bent on exposing corruption, abuse of power and societal ills.