Massive job losses in food and beverage companies are expected in the coming weeks, operators and workers have said.
It was gathered that a myriad of factors such as access to foreign exchange, unavailability of raw materials and the need to observe social distancing in the factories were responsible for the decision of the management of some companies in the sector to lay off workers.
Findings showed that beverage companies, especially breweries, had a stockpile of products in their warehouses that they had not been able to sell during the lockdown.
This, according to stakeholders, is because their major customers – bars, hotels, clubs – have not been opened for business in the past two months.
The acting Director-General of the Manufacturers Association of Nigeria, Ambrose Oruche, told our correspondent that breweries were going through a hard time because most of their warehouses were loaded with goods they could not sell.
He explained that vendors that were dependent on the food and beverage companies had also been impacted by the poor state of business.
Oruche said, “Breweries are really going through a hard time because most of their warehouses are loaded with goods they cannot sell. Why will they produce when they cannot sell? Most of their customers come from bars, restaurants, hotels and hospitality companies.
“Now, hospitality businesses are shut down and the bars have not been allowed to reopen. They have a workforce they will pay and they also integrate backwards to the agricultural sector where they are sponsoring farmers in sorghum production.”
On March 20, the Lagos State Government directed bars and night clubs to stop operating in a bid to limit large gatherings and curb the spread of the novel coronavirus.
This was before the general lockdown which began on March 31 in Lagos, Ogun and Abuja, among others.
Even after the easing of lockdown, bars and clubs have not been reopened. Also, large social gatherings have not been allowed to open with only hotels allowed to start operating less than a week ago.
The Deputy General Secretary, National Union of Food, Beverage and Tobacco Employees, Mike Olanrewaju, explained that the union had received several letters from companies informing them of their intention to sack workers.
According to him, the only thing delaying the redundancy of the workers is a need to discuss terms and conditions with the labour union.
Already, Olanrewaju said contract workers who are not members of any labour union had already been laid off by the companies.
He said, “The effect is so devastating because virtually most of the companies cannot access raw materials and the cost of production due to foreign exchange has gone up.
“The possibility of getting raw materials has gone down. Because of social distancing, companies with about 20 lines of production cannot run more than seven, meaning that many people are now idle, which is not productive enough.
“Some of the companies are contemplating total shutdown while others are planning to reduce their workers by half.
“Some of them are considering redundancy and the situation is highly devastating on food and beverages companies. No company is exempted. Every company is affected badly.”
He added, “Alcoholic and soft drinks producers are affected because there is no massive celebration in the country. People can only do take away at restaurants and many are forced to stay at home. To sell them has become very difficult.
“The irony is that most of these products have short expiry dates because they are consumables. Some can’t last more than six months.”
Olanrewaju called on the government to give tax waivers or holiday to the affected companies until they stabilise and are able to return to normal production.
