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Tuesday, March 21, 2023

BUA Foods Accuse Dangote, Flour Mills of Blackmail, Trying to Profit from Artificial Sugar Scarcity

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The possibility of dearth of sugar in a country beset by spiraling inflation may not be ruled out following allegations by BUA Foods Plc that there are plans by Dangote Sugar and Flour Mills of Nigeria Plc to create artificial scarcity.

In a statement in one of dailies, BUA Foods said it has been inundated by calls from its customers that Dangote Sugar and Flour Mills have both suspended sales of sugar, seeking to know if it will follow suit.

The company that listed in the first week of January to become the most capitalized consumer goods firm in Africa’s largest economy has assured customers that it is not joining the suspension of sugar sales.

BUA Foods in the statement said it did not understand why Dangote has joined such suspension and that the actions taken by Flour Mills may be understandable because their 2022 raw sugar allocation has been declined by the government due to compliance issues.

“In our opinion, this stoppage may be intended to create scarcity, force the prices to artificially go up, profiteer even more, and blackmail the government to review the denial of allocation to Flour Mills due to compliance issues,” said BUA Foods.

“We believe that the government should not be blackmailed into rescinding a compliance-based decision and the process should be allowed to follow its due and proper course,” said BUA.

BUA said it would like to reiterate that it does not intend to join this suspension of sugar nor increase prices between now and Ramadan (a peak demand period for Sugar) as the others have done.

Interestingly, the consumer goods giant has enough capacity between its Lagos Sugar Refinery and Port Harcourt Sugar Refinery with a combined capacity of 1.50 million metric tonnes to meet about 90 percent capacity of local demand in Nigeria.

“IF need be, BUA is ready to stop all sugar exports and channel that to meet local demand. We have always made it clear that our Port Harcourt sugar operation is always ready to support sugar supply if there is scarcity, as we have done in the past in similar situations in 2020 and 2021,” summed the company.

MoneyCentral tried to obtain a statement from the Dangote Group but none was forthcoming.

This is a developing story and will be updated all day

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