Gambia’s only brewery, Banjul Breweries, is threatening to close down unless the Gambian government lowers taxes on beer. The Castel-owned company, which makes the popular Julbrew brand, has said that the recently imposed rise in excise duty on beer from 10% to 75% makes the business impossible to run profitably.
Banjul Breweries was established in 1975 and is now owned by Groupe Castel. It brews the four variants of Julbrew beer, as well as non-alcoholic drinks. It has an output of 300,000 hectolitres annually, although the company stresses that output is much lower currently. It reportedly has an output capacity of 500,000 hectolitres annually.
Castel’s MD in Gambia, Eric Gilson, a long time brewery veteran for the group in Africa, has not been quoted in the Gambian media. But the company has reportedly warned that it will shut down operations in The Gambia if the government does not respond to its letter about the new excise duty – raised in December 2018 from 10% to 75% – before Saturday, May 11th. VAT of 15% is added on top. The new excise tax is believed to have increased wholesale prices by 59%.
Banjul Breweries is making the case that ceasing production will have a knock on effect for wholesalers as well as the tourism industry. It has also warned that, as a flagship French investment in The Gambia, its problems may deter other investors.
The Gambia is not the only country to seek to raise what looks like easy revenue by piling new taxes on alcohol. Nigeria is currently being forced to review its taxes on alcohol, which were raised to try and fill a gap left by falling oil revenues.