Hand sanitiser businesses cry foul
Local manufacturers of hand sanitiser say they are bearing the brunt when it comes to compliance with quality standards.
19 February 2021 | Business
Namibian hand-sanitiser manufacturers have raised serious that the local industry is being crippled by compliance to stringent and costly standards and high import duties while the market is flooded by imported hand sanitisers that are not certified or comply with local standards.
While the finance ministry this week said that import duties and levies have long been in place, importers argue that a levy of N$213.13 per litre was only implemented last year, and not before Covid-19.
Importers and manufacturers point out that ethanol is a cheap product, which is sold at around N$22 per litre, adding that the new levies makes the product too costly to import and sell locally.
“They only notified us in October last year. They say they are doing it to track ethanol, and that if we erect bonded warehouses we can be rebated,” a worried party said, declining to be named for the article citing the already difficult atmosphere which importers and manufacturers are navigating to resolve the problem.
“This whole issue is bad for local business and the economy. The challenges we face in importing ethanol has caused clients to say they are not sure if they can afford to make hand sanitisers anymore. Considering our economy, we cannot afford the loss of more local businesses.”
He pointed out that while Namibia bemoans the current economic climate, local hand sanitiser manufacturers and importers face an uphill battle to create jobs and boost the country's economy.
Moreover, importers note that ethanol is not only used for hand sanitisers but is used in many other manufacturing processes in Namibia.
Strict home standards
A business owner, who spoke on condition of anonymity, said local manufacturers are required to comply with stringent standards and costly and lengthy certification processes, to which imported hand sanitiser products are exempt.
“No one inspects or blocks these goods from being sold. So the local industry is being penalised, and nothing happens with the imported sanitisers, which are imported and sold left, right and centre.”
The Namibia Standards Institute (NSI) requires that the formulation of hand sanitisers require a minimum of 80% of ethanol or 75% of Isopropyl alcohol.
An informal survey of sanitisers sold in pharmacies and grocery stores in Windhoek found that out of 10 different products surveyed, none met the alcohol content or labelling requirements that local producers are required to comply with. None are registered or certified with the NSI.
“Based on the requirements we have to by law comply to, in essence, most of these imported products are illegal and should not be able to be imported,” he said.
Another manufacturer pointed out: “It is not a quick or cheap certification process. It is audit fees and batch testing fees. Our label process is another lengthy process. I lost count of the number of changes we had to make on our labels and we still do not have approval on the labels.”
While the company is still awaiting final certification, which was applied for last year, “imported products come into Namibia, without certification, or according to government guidelines and are sold freely.”
The NSI declined to provide a detailed response to the questions raised.
In a brief response, NSI's spokesperson Mutonga Matali would only say that the NSI is “well abreast with the high regard with which issues concerning hand sanitiser regulations and all related aspects raised in your enquiry are held. The NSI will make a public pronouncement on this matter in due course (sic).”
Finance ministry's spokesperson Tonateni Shidhudhu says excise duties and levies are not new, and that they were gazetted prior to Covid-19. He explained the rates are determined by the SACU tariff board and applied throughout the region.
“Enforcement thereof was merely emphasised after it was noted that illegitimate manufacturers were jeopardising Namibia's revenue interest through the importation of denatured and undenatured ethanol for the manufacturing of hand sanitisers and disinfectants without registration with the Directorate of Customs and Excise as required,” Shidhudhu said.
He added that legitimate manufacturers who import ethanol qualify for a rebate if they apply as per requirements.
“In essence, hand sanitiser and disinfectant manufacturers who are registered with the customs and excise are rebated on their import of denatured and indentured ethanol for purposes of production.”
But local importers say the messaging from customs and other authorities has been uneven and inconsistent, and key officials are difficult to reach to resolve the matter.
“We are very concerned as stakeholders as we are not receiving any help or support, and there is a lot of confusion. At the moment we don't have any idea how to address these challenges. Businesses in Namibia cannot afford this.”