Return of Golden Guinea beer and issues in alcohol VAT sharing formula
When the returned Governor of Abia State, Chief Okezie Ikpeazu, said few years ago that his government will revive the moribund foremost brewery in the state, a lot took him for granted.
Definitely, it has come to pass as the oldest brewery east of the Niger is back and strong with good products that have strong market acceptability.
However, an issue of national importance is the observed lopsidedness in sharing allocations of accruing VAT from consumption of alcohol by FAAC.
When he was Lagos State Governor, Babatunde Fashola raised the issue but did not get the needed support to drive the protest.
According to him then, allocation from VAT coming from alcohol should follow the statistics of consumption just like 13 per cent derivation is holding sway in oil earnings allocation by FAAC. Currently, more political analysts are calling for a review of the allocation in a way that states’ alcohol VAT receipts are in line with their consumption rate so that areas that do not encourage the business should not gain from what they do not support.
Experts say time has come for sharing of VAT earnings from alcohol on the basis of regional turnover in consumption than using the same templates of population and land mass which have nothing to do with Federal Government’s earnings in alcohol VAT after all.
Latest figures rolled out by the National Bureau of Statistics (NBS) showed as follows: Alcohol Consumption Per Geo Political Zone;
South South N74.4 billion
South East N44 billion
South West N37 billion
North-Central N30 billion
North-East N19.6 billion
North West N2.6 billion
Business Hilights recalls that Golden Guinea Breweries Plc is a Nigerian brewery located in Umuahia, Abia State, founded in 1962 by the Eastern Nigerian regional government as an indigenous competitor to foreign manufacturers in the country. The company produces Golden Guinea beer.
Golden Guinea was originally named Independence Brewery Limited, the location was chosen due to the importance of water which led to the selection of a site in Umuahia, the town of the regional premier, Michael Okpara. Production started in 1963 with an annual capacity of 1 million gallons.
The company introduced Eagle Stout to the market in 1967 but between 1967 and 1970 further production was hampered by the Nigerian Civil War. In 1971, the company changed its name to the current one Golden Guinea Breweries. In 1975, the company was revamped and an extension was built by the German firm Coutinho Caro which later later participated in an equity offering issued by the firm.
However, production at the brewery was hampered by a fire incident in 2003 but recent attempts have been made to resuscitate the firm. The company held franchise rights to produce and market Holsten Brewery’s Bergedorf premium lager beer and Bergedorf Malta in Nigeria.
The brewery which has been moribund for years came back to life after the company was in April 2018, granted the sum of N3.6 billion to revive operation.
Majority shares in the company were later purchased by Pan Martine Investments Ltd promoted by Mr. Okey Nzenwa.
A statement issued by the company and made available to Business Hilights South East Bureau chief, revealed that the funding package was provided by the Nigerian Export Import Bank (NEXIM) with the Bank of Industry (BoI) also pitching in with an Economic Revival Facility.
Although, an aide to Governor Okezie Ikpeazu of Abia State, Sam Hart, attributed the brewery resuscitation to the present administration, he noted that “People have taunted us with Golden Guinea. A regular question aides of Governor Okezie Ikpeazu get is where is the Golden Guinea you people promised us? So a resuscitated Golden Guinea will be a mockery silencer”, Hart said.
