Beer Industry in Nigeria

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Beer IndustryIn the second largest beer market in Africa, competition is brewing Even as Western beer consumption slows down due to the global downturn, Nigeria’s beer industry continues to thrive. The country has the second largest beer market in Africa, after South Africa. And with the largest population in Africa, a growing middle class and a large number of drinking-age consumers, the brewing multinationals are jockeying for position in a market that shows plenty of room for expansion.The beer market in Nigeria grew in value by 21.8% in 2009, making it worth USD2.7 billion. And since Nigerians consume just 10 litres of beer per head of population, the market has plenty of room to continue expanding: analysts project growth in value sales of 16.8% in 2010, and average annual growth of 23.45% between 2011 and 2014. Drinking alcohol is a social activity in Nigeria, so 80% of the country’s alcohol sales are on-trade. Beer is the most popular alcoholic drink in the country, making up about 96% of all alcohol sales. The import of beer in bottles or cans for trade is prohibited, in order to support domestic industry. Companies engaged in brewing hops are eligible for ‘pioneer’ status, entitling them to a tax holiday of up to seven years. The excise duty on alcohol was reduced in 2002 from 40% to 20% per litre. Despite the fact that Islamic Sharia law, which bans the sale and consumption of alcohol, is in force in some of Nigeria’s northern states, consumers continue to find means of buying beer. Alcohol in the northern states can be sold in military facilities, which are Federal territory and thus not subject to state laws. Dominant CompaniesNigerian Breweries is the market leader, with an estimated market share of about 65% of beer sales in the country for 2009. Nigerian Breweries’ total revenues for 2009 were USD1.1 billion, up 13% from USD964.9 million in 2008;

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