E-Malt.com News article: Zambia: Zambian Breweries Group welcomes governments’ decision to reduce the excise duty on Eagle Lager

In order to encourage Zambian Breweries Group to continue engaging small holder sorghum farmers in the country the government has reduced excise duty on Eagle Lager from 35 per cent to 30 per cent, the company’s parent SABMiller posted on August, 28.

“The reduction will now enable Zambian Breweries Group to buy more sorghum from peasant farmers in anticipation of increased sales of Eagle Lager,” Marketing Director Patrick Lead said.

Sorghum is the main ingredient in the production of Eagle Lager.

Mr. Lead said excise duty at 35 per cent was too high and that this was reflected in the sales of the beer which had been falling over the last two years due to reduced demand resulting from high pricing.

"We have had problems with pricing of Eagle as we could only fix prices at levels in line with the tax levels. This did not help us as it resulted in sales going down and consequently putting the income of the about 4, 500 farmers growing the crop at risk," Mr Lead said.

He hailed the government for responding positively to requests made by the company to reduce the excise duty on Eagle saying this will translate into a win situation for the government, which will be able to get increased revenue from tax as a result of increased sales, and also a win situation for the farmers who will now be able to sell more as a result of increased demand for the crop.

"We would like to commend the government which has listened to us following thorough consultations with the Ministers of Finance & National Planning, and Agriculture and Cooperatives Dr. Situmbeko Musokotwane, and Dr. Brian Chituwo, respectively. It was during these consultations that it was established that there was an urgent need to protect the small scale farmers in the country who have been growing our sorghum," he said.

Mr. Lead said with the anticipated attainment of regional parity of 40 per cent in excise duty on clear beer by 2011, this was a good gesture to encourage Zambian Breweries to source most of its raw materials locally as it will be able to leverage on the evened playing field.

Statutory Instrument number 46 of 2009 under the Customs and Excise Act has since been issued by the Minister of Finance to effect the reduction.

The launch of Eagle Lager by Zambian Breweries in April 2005, was more than a celebration of a new beer brand in Zambia. It heralded the arrival of a new form of co-operation between the public and private sector in finding solutions to local challenges.

The Eagle project was inspired by the government's programme to increase the ability of the poor to raise their own income, improve quality of life of the poor and enhance sustainable economic growth.


02 September, 2009