Sin tax hike strains brewing industry, NBL warns

Namibia Breweries Limited (NBL) has warned that continuous increases in sin taxes could reach a tipping point for alcohol producers, following the finance minister's recent announcement of a 6.75% tax hike in the 2025/2026 fiscal budget.NBL MD Waldemar von Lieres, warned that the steady rise in sin taxes could soon push brewing costs to unsustainable levels, despite the company factoring these increases into its business strategy. Speaking after the release of NBL’s latest financial results, von Lieres highlighted the growing challenges posed by taxation and the need for broader industry dialogue.“We expect them, we build them into our business. Obviously, there is a point of, I think that regulators also need to look at, at what point does it become too much? Especially in terms of parallel imports, illicit imports, illicit alcohol, because there will be a point where it might become too expensive,” von Lieres said.The need for consultation was also due to sin taxes not being determined in Namibia alone due its inclusion in the Southern African Customs Union (SACU). According to von Lieres, the ministry of finance together with the Namibia Revenue Agency would at some point have to escalate the matter together with the brewing industry. “It is covered within all our business plans. The range of increase was within our planning, so that's fine, but there is a point where I think, the Southern African Customs Union (SACU) in general, in Namibia, through the ministry of finance, NamRa, we need to also see how they actually get involved, because at the end of the day, this is the SACU rate that is applied to Namibia, right? It's actually determined in South Africa, not in Namibia,” he said. Jumbo, as NBL sets sights on East Africa NBL would also now turn its attention to the East African beet markets as it sets its sights on expanding sales to other destinations, on top of doing well in South Africa. The success of NBL in South Africa was seen as a key driver for entering East Africa, von Lieres said. “Being able to sell our products into South Africa, and being able to gain royalties, it was a real drive to streamline our Heineken beverage international business as well, so getting a new partner that looks at the rest of the export markets in Tanzania, Zambia, and really fit. We even did a big launch in Kenya. Because I think if you look at statistics on the East African side, the Kenyan and Tanzanian [markets] show really big opportunities for growth,” he said. According to von Lieres, NBL would also not depart from its current brewing methods and would remain committed to being a manufacturer of high-quality goods. “We are a manufacturer of high-quality products, high-quality beverages, and we want to sell them at a fair and reasonable price to everyone. But we're not going to go the low-cost route,” von Lieres said. “That's not our mantra. We are a quality organisation that will deliver quality beverages,” he added. The brewer reported net profit of N$896 million for the period from 1 July 2023 to 31 December 2024, or over 18 months. Headline earnings per share were 315.3 cents, while net asset value per share was 1 133.1 cents. NBL reported a return on assets of 24% .

Sin tax hike strains brewing industry, NBL warns

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Republikein 2025-04-03

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Sin tax hike strains brewing industry, NBL warns

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