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. Reports Raji Rotimi Solomon
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.
