N112.87bn Tax Expense Raises Fresh Concerns Over Beer Prices in Nigeria

Nigeria’s leading brewing companies are facing a fresh squeeze from higher tax expenses and escalating energy and logistics costs, increasing the possibility of further beer price increases.

Nigerian Breweries, Guinness Nigeria and International Breweries collectively recorded N112.87 billion in tax expenses during the first half of 2026.

That was up from N71.39 billion during the same period in 2025.

The increase coincided with higher costs for electricity, gas, diesel and transportation, all of which are important inputs for breweries and their distribution networks.

Nigerian Breweries accounted for N63.37 billion of the combined tax expense, up from N43.83 billion.

Guinness Nigeria’s tax expense rose to N13.03 billion from N7.32 billion, while International Breweries recorded N36.47 billion compared with N20.24 billion in the previous year.

Despite the higher tax expenses, all three companies recorded increases in profit before tax.

Nigerian Breweries’ profit before tax rose by 18.2 per cent to N156.33 billion, while Guinness Nigeria’s increased to N38.34 billion.

International Breweries’ profit before tax rose to N74.79 billion, although the company recorded a loss after tax.

The contrasting figures demonstrate the impact that taxation and other expenses can have on corporate earnings.

However, industry watchers caution against interpreting the N112.87 billion as cash taxes paid by the companies. Tax expense in financial statements can include deferred tax components.

The more immediate concern for consumers is the combination of taxation and high operating costs.

Breweries must pay for energy to operate manufacturing facilities, while diesel and transportation costs affect the movement of products across Nigeria’s large distribution network.

Analysts at Cordros Research said elevated energy costs and distribution expenses remained among the major risks facing the sector.

The companies are also spending heavily to defend their market positions, limiting their ability to simply absorb every increase in costs.

If those pressures persist, price increases could become necessary to protect margins.

Such increases would affect both retailers and consumers, potentially making beer less affordable and encouraging some customers to shift towards cheaper products.

The development illustrates the wider challenge confronting Nigerian manufacturers: even when sales and pre-tax profits improve, high taxes, energy costs and logistics expenses can significantly reduce the benefits of stronger business activity