Sachet Alcohol Ban Sparks Industry Turmoil as Liquidity Fears Rise
Atume Terfa
Nigeria’s beverage industry is bracing for a storm as the looming ban on sachet alcohol threatens to unleash a wave of financial distress across the sector. With NAFDAC set to enforce a nationwide prohibition on alcoholic drinks packaged in sachets and bottles under 200 ml from December 2025, analysts warn that manufacturers may soon be battling a severe liquidity crunch capable of halting production and wiping out thousands of jobs.
Industry groups have painted a dire picture. The Manufacturers Association of Nigeria (MAN) estimates that the policy could erase as much as N1.9 trillion in investments, placing more than 500,000 direct jobs at risk. Labour unions say the ripple effect could be even more devastating, projecting potential losses of up to 5 million indirect jobs in distribution, retail, logistics, and other support sectors. Many fear that the ban could cripple small and mid-sized distillers who rely heavily on sachet-based products for daily cash flow.
Manufacturers warn that the sudden removal of sachet alcohol from shelves could cause a dramatic drop in revenue, leaving companies with unsold inventory and forcing them to overhaul production lines at a high cost. Analysts also caution that the ban may unintentionally fuel the growth of Nigeria’s illicit alcohol market, as lower-income consumers—priced out of regulated alternatives—turn to unmonitored and potentially dangerous products. Reduced production could also drag down factory utilisation, weakening performance across the entire alcoholic beverages sector.
Industry leaders have voiced strong opposition. MAN’s Director-General, Segun Ajayi-Kadir, described the ban as economically reckless, arguing that improved regulation and stricter enforcement—not outright prohibition—would better address concerns about underage drinking and abuse. Economists like Dr Muda Yusuf warn that the ban will disproportionately harm companies that built their market presence around affordable sachet offerings, while academics such as Abdulmalik Abdulazeez stress that smaller firms may struggle to survive the abrupt transition.
Still, public health advocates insist the ban is long overdue, saying sachet alcohol’s affordability and wide accessibility have contributed to addiction, health risks, and abuse among young people. Labour groups, however, fear the policy could deepen poverty and widen inequality as thousands lose their livelihoods across multiple value chains.
As the December deadline approaches, the debate continues to intensify. What is clear is that the ban is more than a regulatory action—it is a policy capable of reshaping Nigeria’s alcoholic beverage landscape, with economic consequences that could reverberate far beyond factory floors.
