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Tax increase on beer in Cameroon may lead to a downfall of the brewery industry

In a November 27, 2014 correspondence addressed to the Minister of Finance and the President’s Office, in copy, three Cameroonian breweries operating in Cameroon lament the “unrealistic” rate increase in excise duty on alcoholic drinks (this tax is intended to discourage the consumption of products not deemed to be essential), in the 2015 Finance Bill currently being tabled in parliament. This was revealed in an edition of the La Lettre du continent publication.

Indeed, with this tax increase hitting importers of such products as cigarettes, spirits and other luxury items, breweries’ fees could increase by 40%. Brasseries du Cameroun (SABC) of the France-based Castel Group, the Diageo Group’s Guiness and the Cameroon Breweries Union led by billionaire Kadji de Fosso fear “a market collapse” in the alcoholic beverage sector in 2015.

Indeed, Cameroon is a very profitable market for breweries. For example, although there has been some downturn relative to 2011 when sales reached 45.2 billion FCFA (around 68.7 million euros), Brasseries du Cameroun’s sales were still 26.9 billion FCFA (41 million euros) in 2013. The brewery market leader’s shareholders shared 25 billion FCFA in dividends last year.

Visiting Cameroon in August 2014, President of the Africa division of the UK company Diageo, Andy Fennel stated that Guiness is “[their] 4th largest market in the world.” In Africa, Cameroon is also Diageo’s 2nd largest market after Nigeria with its market of over 120 million consumers compared to 20 million only for Cameroon.

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