Nigeria Food and Drink Report Q1 2007

Nigeria's food and drink industry continues to be plagued by problems, as discussed in BMI's newly published Nigeria Food & Drink Report for Q107. Bird flu has cropped up again as a major health concern, with the UN's Food and Agricultural Organization (FAO) urging the country to increase its control measures on poultry farms and markets to limit the spread of the virus. The outbreak of the virus has had a major impact on the country's food and agricultural industry since it was discovered in Nigeria in early 2006. For the majority of the country's 133mn people, many of whom live on less than US$1 a day and cannot normally afford poultry protein, the outbreak presents an even bigger risk. In some poultry markets in Lagos, the largest city in the country, dead birds are reportedly being sold at huge discounts to low-income consumers who are not as aware of the risks involved. Hoping to reduce the risk to humans, the FAO is encouraging enhanced control measures, such as veterinary inspections and improved hygiene and is discouraging the home slaughtering of chickens. Since the beginning of the outbreak, approximately 300,000 birds have died from the virus with another 400,000 culled.

Meanwhile in the country's drinks industry, the supply director for Guinness Nigeria complained at a recent conference that the country's erratic power supply has led to a breakdown in infrastructure, and that the lack of vocational skills has led to a strain on the country's brewery industry. The Nigerian drinks industry is one of the country's most dynamic, with beer the most popular drink by far, accounting for an estimated 96% of the total volume of alcohol sold in the country in 2005. Therefore if a company the size of Guinness is complaining about infrastructure issues, these must surely be hitting the country's smaller producers even harder. However, there was better news when it came to the soft drinks industry, as Coca-

Cola, the world's largest beverage company, announced a 4% rise in underlying operating profit to US$6.3bn during 2006. Volumes were driven by the company's international operations, with doubledigit volume growth experienced in Nigeria.

Despite these difficulties, BMI is forecasting considerable growth in food consumption in both overall US dollar terms and in per-capita terms to 2011. Total food consumption will reach US$35.41mn in 2011, while per-capita consumption will reach US$229.7 - a significant improvement on 2006 levels, representing an 18.9% increase, although still incredibly low in comparison to global levels. The drivers behind this increase will be the country's continued economic development and high GDP growth, which will sustain consumer confidence, provided oil prices remain high and there is no drastic decline in world prices.