…as firms face uncertain future, dwindling revenues, This is a season of business agony for alcoholic beverages firms producing sachet variety of alcoholic drinks.
Reason: the National Agency for Food and Drug Administration and Control has begun enforcement of the ban on the production and sale of alcoholic beverages packaged in sachets and small plastic or glass bottles below 200 milliliters.
Recall that the idea of a ban was first mulled by NAFDAC in 2018, but following a series of meetings and consultations, the federal government gave alcohol beverages companies about five years lifeline and moratorium to adjust their plants and production line. This moratorium expired in 2023.
Last September, NAFDAC revisited the issue but the federal government intervened, urging for more consultations. Finally, the National Assembly gave a nod for the enforcement of ban effective December 31, 2025.
Two weeks ago, NAFDAC began enforcement, even amidst protests by affected alcoholic beverages firms, Manufacturer Association of Nigeria and rights groups.
But the agency has clarified that it did not shut down any alcohol-producing company, but only prohibited the sale of alcohol in sachets and small containers, citing public health concerns.
In Defense of Action
In a statement penultimate Thursday, the Director-General of NAFDAC, Prof. Mojisola Christianah Adeyeye, noted the move was geared toward protecting children, adolescents and young adults from the harmful use of alcohol
“The National Agency for Food and Drug Administration and Control has resumed enforcement of the ban on the production and sale of alcoholic beverages packaged in sachets and small-volume PET or glass bottles below 200ml, in line with a resolution of the Senate of the Federal Republic of Nigeria and the Agency’s public health mandate,” the statement read.
“It’s going to be a huge revenue loss for us. Sachet alcohol in small volume packaging and in PET bottles is a source of high-volume, and high-turnover revenue… the affordability and high demand for sachet alcohol make it a major income driver, particularly within the lower-income consumer segment.”
— Anonymous staff member, Grand Oak Limited (formerly Nigeria Distilleries Limited)
According to the agency, the pervasive availability of high-alcohol-content beverages in sachets and small containers has made alcohol cheap, easily accessible and easily concealable, contributing to rising cases of underage drinking, addiction, domestic violence, road accidents, school dropouts and other social vices.
Adeyeye stated that placing warning labels, such as “Not for children” on sachets and small containers had proven ineffective due to societal realities.
“Many parents do not even know their children consume sachet alcohol because the pack size is small, cheap and easily concealed,” she said.
She noted that reports from schools had shown disturbing trends, including a recent case in which a teacher disclosed that a student claimed he could not sit for an examination without first taking sachet alcohol.
NAFDAC noted that in December 2018, it, alongside the Federal Ministry of Health and Social Welfare, and the Federal Competition and Consumer Protection Commission, signed a five-year Memorandum of Understanding with manufacturers to phase out sachet and small-volume alcohol packaging by January 31, 2024.
The moratorium was later extended to December 2025 to allow manufacturers to exhaust existing stock and reconfigure their production lines.
“The current Senate resolution aligns with the spirit and letter of that agreement and with Nigeria’s commitment to the World Health Assembly Global Strategy to Reduce the Harmful Use of Alcohol,” she said.
Adeyeye stressed that the ban was not punitive but protective.
Implications for affected firms
As a result of the ban, analysts say alcohol beverage companies in Nigeria face significant operational, financial, and strategic shifts, including the immediate need to reconfigure production lines and the potential for a temporary, but significant, loss in revenue. While the government’s argument is that the ban is to curb public health issues, many believe the move may force these companies to move away from a core, high-volume, low-cost product segment.
According to Ambrose Omokordion, Chief Research officer at Investa in his chat with Businesses Hallmark, “One of the consequences and actions for those companies involved is that they are forced to stop producing sachet and small-bottle products, necessitating expensive retooling of factories to focus on larger packaging, which may have higher price points and lower volume turnover.
He noted that “The loss of sachet products, which are designed for low-income, high-volume markets, threatens a major revenue stream. While large companies may have the capital to adapt better than smaller ones, they still face a significant contraction in their market reach.
In his own contribution, Saeed Adeleke, a market analyst, told this medium that “Manufacturers face the urgent task of managing, disposing of, or converting existing stocks of sachet products that were banned as of December 31, 2025, with enforcement accelerating in 2026.
He said “The abrupt stop to this production line has caused protests from manufacturing unions, who argue that the ban threatens thousands of jobs directly and indirectly involved in the production and distribution chain.
Don’t forget that companies are being pushed to focus on premium, higher-volume, or alternative packaging, potentially shifting their target demographic away from the mass low-income market towards middle-income consumers.
Many of the firms are said to have a major part of their production in distilled spirit (liquor that contains no added sugar and has, at least, 20 percent alcohol by volume) and could see negative top-and-bottom-lines with the implementation of the ban.
Ayorinde Akinloye, a consumer and brewery analyst at CSL Stockbrokers, said the ban has no justification, because they are not illegal products.
According to him, if a ban is placed on the sale of alcohol in sachets and small bottles, it should as well be placed on others in bigger bottles, such as Vodka, Johnnie Walker, among others.
“It is going to impact negatively on their revenues, making them go under, because the biggest portion of their sales comes from the small-sized bottles and sachets,” Akinloye said.
He noted that alcohol in sachets serves as an alternative for an average consumer, explaining that if the industries start producing in bigger bottles, they will be more expensive, thereby making them hard to reach their market.
Operating Market Environment
It must be noted that alcoholic beverage sector is an increasingly lucrative industry. According to AsokoInsight market data, beer is the most widely consumed alcoholic beverage with a 55 percent market share, followed by spirits (30 percent) and wine (15 percent). Spirits are gaining traction, with Guinness Nigeria now focusing attention on the segment.
There are three major companies that produce distilled spirits: Intercontinental Distillers, Nigeria Distilleries and Stellar Beverages.
There are also smaller players with no significant name recognition littered across Lagos, Ogun and some other parts of the country.
Sachet alcohol drinks, such as Chelsea London Dry Gin, DeRok Chocolate Liqueur, Squadron Blended Dark Rum, Eagle Aromatic Schnapps, Action Bitters, Bull London Dry Gin, are made by Intercontinental Distillers. On the other hand, Big Ben London Dry Gin, Captain Jack, and Royal Standard are made by Stellar Beverages, while Seaman’s Schnapps is made by Nigeria Distilleries.
Euromonitor, a global market intelligence platform, states that the growth in sales of mainstream and lower-priced spirits faces a threat from the enforcement of the ban on sales of spirits in sachets and small plastic bottles.
“Many parents do not even know their children consume sachet alcohol because the pack size is small, cheap and easily concealed.”
— Prof. Mojisola Christianah Adeyeye, Director-General, NAFDAC
The argument is that Nigeria’s stunted economic growth has been squeezing the wallets of consumers, paving way for the ‘sachet economy’ to expand at a pace faster than the country’s gross domestic product (GDP).
Market trend reveals that since the 2016 recession, Fast Moving Consumer Goods (FMCG) companies have been rolling out sachet products to enable them to penetrate the larger low-income market, which has been hit by the harsh contraction breeze.
Data from the National Bureau of Statistics (NBS) on GDP by Income and Expenditure approach at 2010 purchaser’s values show that consumption expenditure of households has been declining at varying pace since it rose by 1.5 percent in 2015. Also, the per capita income in Nigeria has declined to $2,049 in 2018 from $3,268 in 2014, according to the International Monetary Fund (IMF).
A 2018 Global status report on alcohol and health by the World Health Organisation (WHO) showed Nigeria had high total per Capita alcohol consumption at 25.5 litres in 2016.
Major alcohol manufacturers in Nigeria have historically produced alcoholic drinks in sachets and small PET bottles (e.g. Chelsea Dry Gin, Seaman’s Schnapps, Action Bitters.
Uncertain Expectations
At Grand Oak Limited, Sango Ota (formerly Nigeria Distilleries Limited), Business Hallmark was unable to get their reaction to the implications of the ban on the company’s bottom line, as none of the officers was ready to talk, but a staff who craved anonymity told this medium that the implications of the ban on sachet drinks is huge.
“Sachet alcohol in small volume packaging and in PET bottles is a source of high-volume, and high-turnover revenue for us here, and not only ours alone, but our competitors. I’m not talking about the big producers like Guinness, Nigeria Breweries, as they don’t produce in sachet. You know that Seaman’s Schnapps is our well-known legacy brand, the affordability and high demand for sachet alcohol make it a major income driver, particularly within the lower-income consumer segment, before recent regulatory ban. It’s going to be a huge revenue loss for us.
Last week, the Manufacturers Association of Nigeria called on the Federal Government to intervene in the renewed implementation of a ban on sachet and small PET-bottled alcoholic beverages by the NAFDAC.
MAN warned that NAFDAC’s campaign is disrupting businesses and creating confusion due to multiple and conflicting directives. In a statement last Tuesday, the Director-General of MAN, Segun Ajayi-Kadir, claimed that NAFDAC had, in the last two weeks, proceeded to enforce the ban despite existing government directives and legislative resolutions restraining the agency from such action.
Ajayi-Kadir warned that the ban threatened jobs, government revenue, and indigenous manufacturers. “This unnecessary action of NAFDAC is detrimental to the survival of the concerned indigenous industrial operators.
The industry faces a major shift, according to Dr. Olufemi Omoyele, of Ekiti State University’s Entrepreneurship Centre, “as regulators phased out small-volume sachets due to health concerns, which aimed to curb this revenue stream. Therefore, in terms of volume and cash flow, sachet alcohol was a major profit driver for manufacturers like Nigeria Distilleries and others.
As it’s now, the enforcement has led to huge revenue losses and economic distress for manufacturing companies, with industry groups warning of a potential ₦1.9 trillion loss in investments.
According to MAN, the ban could cascade into the loss of ₦1.9 trillion in investments and the potential layoff of over 500,000 direct employees and 5 million indirect workers, including distributors and retailers.
The Food, Beverage and Tobacco Senior Staff Association (FOBTOB), said for many local distillers, sachets and small packaging are the fulcrum of their business models, which translates to the fact that the ban could ultimately lead to an economic shutdown for them, even if factories are not formally closed.
Dr. Omoyele noted that “it will lead to a massive underground market similar to what happened to liquor in the 30s America during the Prohibition, shortly before the Great Depression.
