Cameroon’s Beer Prices to Rise: Dovv Distributors Announce Prices Jumping by 100 CFA Francs Next Month
Philippe Tagne Noubissi, CEO of Dovv
The beer market in Cameroon is set to experience a price adjustment as Dovv Distributors, a key player in the distribution of alcoholic beverages, has announced an increase in beer prices by 100 CFA Francs starting next month. This development is poised to impact both consumers and businesses within the industry.
The price hike comes at a time when the beer industry in Cameroon has been navigating a complex landscape of economic challenges and consumer demand shifts. The increase is attributed to various factors, including inflationary pressures, changes in taxation, and the rising costs of production and logistics.
For consumers, the price rise means adjusting their budgets to accommodate the higher costs of beer. This could potentially lead to a decrease in consumption or a shift towards alternative beverages. On the other hand, businesses, especially local bars, and retailers, may face a dilemma between absorbing the additional costs or passing them on to consumers, which could affect their competitiveness and customer loyalty.
The announcement by Dovv Distributors is a reflection of broader economic trends affecting the region. The beer market in Cameroon has seen fluctuations in pricing over the years, influenced by both global and local economic conditions. The recent trends in the beer industry, including the rise in non-alcoholic beer demand due to increased health awareness, are reshaping the market dynamics.
Moreover, the beer industry in Cameroon is a significant contributor to the economy, with investments and production volumes expected to grow. Leading companies like SABC are planning multiple investments to boost production volume, which could potentially offset the impact of price increases over time.
As the market adjusts to the new pricing, it will be crucial for stakeholders to monitor consumer behavior and adapt their strategies accordingly. The upcoming months will reveal how the price increase will influence the beer market’s landscape in Cameroon and whether it will lead to significant changes in consumption patterns and industry practices.
For more detailed insights into the beer market trends and forecasts in Cameroon, interested parties can refer to comprehensive market research reports and analyses that provide a deeper understanding of the sector’s trajectory.
However, the National Union of Distributors of Hygienic Beverages is demanding that 50% of the proceeds of the planned increase be paid to them, failing which they would themselves proceed to a price increase from May 6.
The National Union of Distributors of Hygienic Beverages of Cameroon (Synasdibohycam) has just joined the advocacy carried out since 2023 by the Cameroon alcohol producers association (CAPA) which brings together, in addition to brewing companies, distillers such as Sofavinc, Fermencam, etc., for a readjustment of beer prices due to the explosion of production costs at the global level since 2020. A few days after the CEO of the Société Anonyme des boissons du Cameroun (SABC), Stéphane Descazeaud, revived the debate by describing an “inflationary tsunami” which, according to him, has already exhausted all the resilience that the brewing sector has shown so far, the CEO of Dovv, Philippe Tagne Noubissi, who claims the leadership of the distribution market in Cameroon, sent a letter to the Minister of Trade (Mincommerce), Luc Magloire Mbarga Atangana, on March 23 to inform him of the decision of his peers to increase the prices of beers as of May 6. This increase mainly concerns Sabc beers, the price of which will be increased by 50 CFA francs per unit for small bottles and 100 CFA francs per unit for large ones.
Synasdibohycam, which met with its decentralized bodies on 23 March, reports the difficulty of its members to continue their activity due, in particular, to the maintenance of the sale price of Sabc products, which has made the distributors’ margin insignificant, “at least divided by 2”, in a context of a tenfold increase in operating costs, marked by “several previous increases in the purchase price of the brewing product locker, without an increase in the discount, resulting in an uncompensated increase in the cost of capital invested; the increase in the minimum wage; the double increase of 25% and 15% in the cost of fuel in the space of one; the increase in the cost of customs and therefore in the price of rolling stock for distribution; increasing the tax burden; the rising cost of living at all levels.” What’s more, the distribution system has completely changed in the meantime to the detriment of distributors, according to Philippe Tagne Noubissi.
“Before, distributors would take the products and sell them practically on their doorstep without having to go and distribute them in the neighborhoods through vehicles. The company changed the system by completely transferring distribution to the distributor, who became a transmission belt between the producer and the retailer. Today, Sabc has completely withdrawn from the distribution circuit. The logic, because the vending machine had to have more space, was that it would have to gain through volume. But, honestly, that’s not what’s happening,” he complains. This new system is much more restrictive for distributors in terms of investments. “Before, a distributor who was vulgarly called a wholesaler needed, let’s take a banal rate, a capital of about 100 million CFA francs. Today this is not possible. Some spend 2, 3 or 4 billion CFA francs after having borrowed heavily from the banks,” the CEO of Dovv. He continues, concerning the consequences of the 40% increase in the price of fuel “which is the highest after staff”, that they have led to the bankruptcy of 40 to 50% of distributors since 2018. According to him, out of nearly 300 members of the corporation, for about 30,000 jobs, only about 150 have survived to date. “We sent tons of correspondence to the Sabc, the Ministry of Commerce, etc., there were endless consultations and debates, but nothing changed. At this point, the government must put all parties on the same table and, based on the charges that each one makes, decide at least that on each bottle of beer, a distributor gets away with at least 70 CFA francs,” Synasdibohycam argues. Moreover, this organization is campaigning, like the SABC, for the upward revision of beer prices. However, it stipulates that 50% of the proceeds of this increase must be returned to the distribution segment. New discussions between actors of the different segments of the sector are expected, under the aegis of the Minister of Trade, especially after the exit of retailers through the National Union of Operators of Drinking Establishments (Synedeboc) yesterday, in which they in turn threaten to proceed with a downstream increase of 100 CFA francs on the bottle of beer. Synasdibohycam does not rule out stopping the activity if the government blocks its plan to increase prices. For his part, the CEO of Sabc stresses, beyond the new increase in excise duties decided in the 2024 finance law, which “only adds insecurity to the already palpable fragility” of companies in the sector, that Cameroon remains the only country to have frozen the prices of beverages despite the vertiginous rise in fuel prices, raw materials, electricity, gas, and consumables. Over the last two years, the leader of the beer market in Cameroon has reportedly incurred additional expenses of 33 billion CFA francs, just for inputs.
