The Nigerian wine market is
booming. It enjoys patronage from far and wide. Projection shows that
the future is bright for the market. The snag is the market favours
importers than local wine producers. Smuggling, massive importation,
unfavourable policies, epileptic power supply, are forces threatening to
kill the local business.
The wine market is about the oldest
trade in the world. For some countries, wine is a major source of
revenue. Last year, the United States (US) recorded $32.5 billion in an
estimated retail sales value. That same year, wine exportation reached a
new record of $1.39 billion.
While some countries are known for
producing and exporting wines, some are notable wine consumer markets.
Countries, such as France, Italy, Spain (vino espanol), Argentina, are
the world’s largest wine producing countries. For a country like
Argentina, its citizens consume 90 per cent of the wine it produces.
Italy is rated number one among the wine-producing countries.
Africa is not left out in the
international wine market. Presently, South Africa is the largest
wine-producing country on the continent; Nigeria is the largest wine
consuming market. In Nigeria, it is a a case of producing what we don’t
consume and consuming what we don’t produce.
Nigeria’s wine market is valued at $300 million, which would give it N47.4 billion per annum.
Mtome Mbatha, the Marketing Manager,
WOSA (Wines of South Africa) for Africa and America’s said: “South
African wines currently account for about one-fifth of all wines sold in
Nigeria.” This is at the detriment of wine and liquor producers in
Nigeria.
Liquor drinking in Nigeria was limited
to palm wine, burukutu and Ogogoro (locally brewed gin), the western
wine wasn’t an appeal, and the importation was low.
Seaman Aromatic Schnapps, Sailor Dark
Rum, Bacchus Tonic Wine and Finlays were the first set of locally
manufactured liquors in the country. Gradually importation of liquor and
wines became the order of the day.
Wine and liquors have gone beyond just
drinking and appreciating the taste, it has become a social status
symbol thing. There is this growing appetite for premium and higher-
priced brands in Nigeria. The more expensive your brand is, the more you
are respected.
Now in various night clubs, your status
is defined at a glance on your table. Brands, such as Hennesy, Red
Label, Jack Daniels, Grey Goose, Bisquit, are prominent liquors on the
table of the rich. Some of these brands go for some ridiculous amount of
money. For a club on the island, a bottle of Hennesy V.S.O.P goes for
N45,000.
In the wine categories, the Baron brand
family are the commonest. Go to any party and you find different variety
of the Baron brand being served. Gone are the days when Eva was in
vogue. For the middle class, wines like B ‘N’ G Cuvee, CarloRossi, E and
J Gallo, Hardy’s, Baron brands (De Valls and Romero), for the ladies we
have Night Train and so on. For the the upper class, wines like Blossom
Hill, Jacobs Creek, Sutter Home, Robert Mondavi, Yellow Tail and
Beringer grace the shelves and tables of the affluent.
The least of these wines goes for
N60,000 for just one bottle and could only be bought in selected stores
and wine shops. Some even go the extra mile of ordering for customised
wines from wine manufacturers in Europe and South Africa.
The battle for the wine market is high,
especially for those who import and distribute foreign brands. The
drinking age population is increasing, giving rise to the high demand
for wine. This is a major factor in the growth of the industry.
The major battle is between the European
wine manufacturers and the South African wine manufacturers, competing
for space in the Nigerian market. The importation of these foreign
brands incapacitate the local brands.
The malaise of smuggling is another major factor that is slowly leading the local wine companies to the slaughter slab.
Executive Secretary of the Distillers
and Blenders Association of Nigeria Aare Fatai Odusile called for the
intervention of the government. He said: “Government must take urgent
and decisive action on the industry to avert its total collapse as a
result of smuggling activities.”
For every country that wants economic
growth, it must first invest in its own manufacturing industries. The
adverse effect of this industry collapse includes: job loss of about
120,000 workers. The industry turn out N40 billion in corporate taxes
and value added tax (VAT) and N2.17 trillion market capitalisation on
the Nigerian Stock Exchange (NSE). With the current trend in the wine
market, the sales of wine would double in the coming years. Of course
that is an encouraging projection but how would it affect the local
manufacturers positively when 62 per cent of the market is controlled by
the foreign wine brands and the smuggled one’s inclusive. The South
African wine producers eye the potential growth of wine consumption in
Nigeria and are working hard to take a share.
According to the Chief Executive
Officer, WOSA, Su Birch: “With a projected annual GDP growth of 11.8 per
cent until 2016, Nigeria would be the fourth most populous nation by
2050 and cannot be ignored by South African wine producers”
At this point, the bulk of the
responsibility lies with the government. The above analysis has shown
that the government over the time has been nonchalant about the
impending danger of killing local manufacturers. The government has a
pivotal role to play in growing local businesses. Putting policies that
would favour the industry is very important. Also combating the malaise
of smuggling is another way of growing the industry. The life-long issue
of power is another mountain that garrulously stands in the way of
manufacturers. If all these problems could be tackled head-on by the
government, then the business of wine making would favour local
manufacturers, more companies would spring up creating more jobs and
above all the economy would experience a boost from the wine industry.
Reports
Raji Rotimi Solomon
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