The demand for luxury items like champagne keeps increasing in the market in spite of plans by the Federal Government to generate more revenues through increased tax on luxury goods.
The Minister of Finance and Co-coordinating Minister for the Economy, Dr Ngozi Okonjo-Iweala, had on Nov. 16, 2014 announced the measure that was aimed at cushioning the effects of falling crude oil price.
She said, “We all know the definition of luxury goods, we are still compiling the list and one of the things we can tax is champagne, alcoholic beverages …
“We are putting the list together but we intend to do a surcharge going forward on these items.
“The principle is that those who are better off in the society and I hope they won’t mind, will be willing to share a bit more in remitting a little bit more to the treasury than what they normally do’’.
Champagne has long been synonymous with quality and opulence having built up a reputation for luxury appeal, an undeniable allure attracting the rich, famous and ardent collectors alike.
The prices of champagne fluctuate according to supply and demand, vintage, the economic conditions of the wine producing country, high cost of processing and maturation.
Rareness and quality are also key price determinants, the people who want the best are usually willing to pay whatever it takes to get it.
Nigeria’s large wine market continues to show strong growth as a result of the increasing disposable income of the middle class as well as the gradual shift from beer to wine consumption.
Wine is generally perceived to be a healthier alcoholic beverage. This is creating export opportunities for wine exporting nations like Italy, France and U.S.
Nigeria’s large and increasing population (over 160 million), increasing health consciousness and upward social trends are assisting growth in wine exports to Nigeria.
Most weekends, champagne is usually binged upon at weddings, birthday parties, clubs, burials, reunions, bachelor’s eve, bridal showers, musical video shootings, product launch and beach parties.
According to a 2013 report by Euromonitor International, a research firm reveals that Nigeria is the second fastest growing market in the world for champagne, noting that between 2006 and 2011, it achieved a compound annual growth of 22 percent.
According to the report, total champagne consumption reached 752,879 bottles (75cl) in 2011, higher than consumption in Russia and Mexico; thereby, placing Nigeria among the top 20 champagne markets in the world.
In 2010, Nigeria consumed about 593,000 bottles, the highest consumption in Africa. The closest to this figure was South Africa, another country that has been identified as an emerging market for luxury goods in addition to Nigeria.
According to the research firm, Nigeria spent an estimated 59 million dollars (N9.4 billion) on champagne in 2012, a remarkable rise from 49 million dollars (N7.8 billion) in 2011. It also projected that the value could rise to 105 million (N616.8 billion) or 1.1 million litres consumption by 2017.
“Champagne has its own demography — it’s not even about the middle class, it’s about the elite.
“Nigeria is a very divided society with big sections of the population in the working class, while the elite have the money to spend on really extravagant consumption,’’ Spiros Malandrakis, senior analyst at Euromonitor, had said.
Expectedly, the different champagne brands are cashing in on the country’s love for fine wine.
“Nigerian champagne consumption is quite high. We are building our network here and it is one of the most attractive places for us at the moment,” said Charles Armand de Belenet, Global Marketing and Communications Director, Pernod GH Mumm and Perrier Jouet Champagne brands.
At the Apongbon and Trade Fair markets, the retail price of Remy Martin is between N6,000 and N7,000; a Moet & Chandon, one of the most popular champagne brands sells for N12, 500.
Dom Perignon sells for N29, 500, Hennessey VSOP cost N8, 000, Nectar Imperial Rose goes for N10, 500, and Johnnie Walker Blue Label cost N32, 000.
The price is usually higher at some night clubs and bars. Sometimes, it doubles the retail price at stores and supermarkets.
“Nigerians like enjoyment; names sell because people like to be associated with luxury goods. It gives them satisfaction and pleasure.
“It is a known fact that consumables are in high demand and you cannot go wrong selling them.
“Thursdays, Fridays and Saturdays are the peak periods for clubs; on some nights, we have customers who buy as much as six bottles of champagnes,” said Karimot Iyaniwura, General Manager, Le Reseau Restaurant and Lounge, Ibadan.
Iyaniwura said that location, taxes and bills were factors that influenced prices of champagne at bars and nightclubs.
“It has become status symbol, sometimes people just want to show off. The more highbrow the club, the more expensive the drinks,’’ Iyaniwura said.
For clubbers, the status hype it confers on them is enough reason to purchase champagne at clubs.
“Every time you pop a bottle of champagne at the club, you are rated as a ‘Big Boy’, you increase your popularity and influence level with babes,’’ said a regular club goer who simply identified himself as Adams.
In 2013, Alexander Amosu, luxury brand designer produced Goût de Diamants champagne (Taste of Diamonds) valued at £1.2 million, making it the most expensive single bottle of Champagne in the world.
The limited edition bottle is made from 100 per cent Grand Cru grapes and each bottle of Goût de Diamants is adorned with a brilliant cut Swarovski crystal in the centre of a diamond-shaped pewter design resembling the Superman logo.
Surprisingly, weeks after the launch of Goût de Diamants champagne, renowned producer and Mavin Records boss, Don Jazzy and Peter Okoye of PSquare group were among the first privileged persons to taste the champagne in Nigeria.
“A glass of champagne cost about N60 million each, am I mad? If I taste it, may I never drink water again in my life,’’ exclaimed Ebenezer Njoku, a banker and customer at Quillox Night Club.
The craze for champagne is also evident as most videos produced by Nigerian musicians’ shows a display of exotic wine bottle being popped in one of the scene of the videos. Notable among the videos is Dr Sid’s “Pop Champagne’’ music album.
The latest trends popular amongst youths is to pour champagne on the head of a birthday celebrant who kneels for the “baptism and blessing’’ of his new age with champagne.
The recent general elections also contributed a large chunk to the champagne markets as some politicians reportedly bought several bottles to entertain guests at the numerous parties they had.
It was reported that some politicians popped several bottles in celebration of their victory and the success of their parties at the just-concluded general elections.
Some ardent wine lovers defend their intake with scriptures, claiming that wine intake was biblical, thus an approved practice. They cited Jesus’ first miracle of turning water to wine at a wedding ceremony in Canaan and also the admonition of Apostle Paul to Timothy that he should drink wine for his health.
Mr Jude Ikechukwu, an ardent lover of Hennessey said that “my conviction is based on those two incidents in the Bible. For me, the costlier the wine, the better and healthier’’.
Dr Olubukola Ashaolu, radiologist at Olabisi Onabanjo Teaching Hospital, said that red wine is good for the heart but cautioned that it should be taken with moderation.
“Other alcoholic drinks have hazardous effects on a person’s vital organs like the kidney, heart and liver.
“Medically, we advise intake of red wine but it should not exceed a wine glass once in a while,’’ Ashaolu said.
Mrs Ojuolape Femi-Ayodele, Managing Director, Lapelle Event, said that the volume and quality of wines consumed at parties had a lot to do with the social status of the person having the party.
“If the person is someone that is rich, he will actually want the opulence to reflect in everything served and done at his party.
“Most wealthy people like to do things to impress their friends, their mindset usually when organising a party is ‘a one in town kind of party, rave of the moment party that will be talked about for months.
“No some of them it is a competition among cliques Nothing less than the best and costliest champagne at their parties,’’ she said.
Mr Henry Boyo, an economist, said that high consumption of wine have a negative effect on the nation’s economy due to its pressure on the foreign exchange.
“We are enriching other nations at the expense of our own economy and depriving our youths of employment opportunities because we are transporting all our employment opportunities abroad.’’
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