(Business in Cameroon) - Following a meeting, January 15 in Yaoundé, with brewers and other alcoholic drinks producers, the Cameroonian trade ministry announced government is maintaining the current selling prices of alcoholic beverages across the territory. This is pending the validation of the revised pricing grid to be established by producers, we learnt.

This announcement was unexpected since some major distributors and outlet owners in Yaoundé had already suspended sales awaiting the price hike decision, in order to adjust it to consumers charge and old stocks.

However, to prevent such adjustments, the National Fraud Control and Enforcement Brigade of the Trade Ministry completed an inventory of available beverage stocks with wholesalers and distributors in the country's capital on January 15.

This inventory mission that began 5 days earlier (January 10) aimed to identify the remaining stocks on the sidelines of “the assessment of the impact of excise duties introduced by the 2019 Finance Act on the prices of alcoholic and hygienic beverages, and the planned price increase by the national brewing industry,” according to an official document from the department.  

For the Cameroon Alcohol Producers Association (CAPA), the new tax measures relating to the calculation of excise duties, as provided for in the 2019 Finance Act, have an average impact ranging from XAF70 to 115 per bottle currently sold to XAF600.

This financial impact of excise duties, combined with other taxes such as VAT (19.25%) and the 2.2% withholding tax, have an “average total impact ranging between CFA85.02 and 139.66 per bottle,” we learnt.

This tax burden, CAPA members said in an open letter sent in November 2018 to the Minister of Finance, should lead to “an average increase by XAF100 to 150 per bottle, on the current selling price", in order to guarantee a certain financial balance to producers.

However, in December 2018, following a meeting with brewery companies and other producers of alcoholic beverages who are members of CAPA, the Cameroonian government, through the trade ministry, announced that the increase in selling prices, following the tax measures enacted by the 2019 Finance Act, would not take place until January 15, 2019.

Beverage producers for their part said if this planned price increase does not take place in the desired proportions, this could lead to cost reduction measures such as staff reduction, the elimination of purchases of local raw materials or the freezing of certain investments by producer companies.

Brice R. Mbodiam