Impact of Excise Duty Policy on the Beverage Manufacturing Industry in Nigeria

This study investigates the impact of recent excise duty policy changes on the beverage manufacturing industry in Nigeria. Excise duties on alcoholic beverages, carbonated drinks, and tobacco products have been revised upward in successive Finance Acts and budget circulars, reflecting both revenue objectives and public health goals. However, the industry has raised concerns about the competitiveness impact of rising excise burdens, the emergence of smuggled products competing with legitimately taxed domestic goods, and the effect on employment within the sector. Using a PGD professional research design, the study analyses five years of industry financial data from fifteen listed and unlisted beverage companies, supplemented by primary data from structured interviews with twelve production and finance executives at firms headquartered in Lagos, Ogun, and Kano states. Econometric analysis of revenue, output volume, and employment trends before and after key excise rate changes is conducted using time-series regression. The study expects to find that sharp excise increases reduce formal sector sales volumes while increasing the market share of untaxed informal and smuggled alternatives, ultimately undermining the intended fiscal and public health objectives. Recommendations include phasing excise increases gradually, strengthening customs enforcement against beverage product smuggling, and engaging the Manufacturers Association of Nigeria in consultative excise policy reviews. Keywords: excise duty, beverage manufacturing, fiscal policy, smuggling, industry competitiveness.