The State Minister in Charge of Industry at the Ministry of Trade, Industry and Cooperatives David Bahati has pledged to work with Uganda Breweries Limited (UBL) and other sector players in addressing the challenge of illicit alcohol that costs the Government billions of lost taxes.
This, he said during a tour at the UBL facility in Luzira on Thursday.
According to the 2021 Euromonitor Report, illicit alcohol takes 65% market share in Uganda, and every year the Government loses about Shs600b in taxes through the manufacture and sale of illicit alcohol.
“As Gov’t, we are going to continue working with you to ensure that we fight illicit alcohol because it’s a source of loss of revenue, but also it is a source of health problems because these products that are being produced, we don’t know the elements,” he stated, citing at an incident that happened in Arua when 28 people died after consuming illicit alcohol.
Bahati said that UNBS has to be on the ground, even after giving someone certification. He said that there’s a need for regular monitoring and to see compliance levels.
The Minister also applauded UBL for backing the Government’s target of import substitution and export promotion. He said UBL’s efforts on import substitution and export promotion underscore the importance of supporting local industries to drive economic growth.
“I am glad, that what you are doing is what it means to have an integrated and self-sustaining economy. Please support our local manufacturers, and I am happy, that you are discussing with them. ”
One of the key Government targets in the National Development Program (NDP) III is to ensure an import substitution and export promotion strategy to encourage labor-intensive light manufacturing, cottage industries, heavy manufacturing for job creation, and technology importation, with the major objective of creating jobs for the youth.
The UBL Managing Director Andrew Kilonzo said the import substitution agenda, in 2017 partnered with Kakira Sugar to produce high-quality neutral spirit and started sourcing its raw spirit from Uganda, which is estimated to have improved Government collections from neutral spirit by Shs13 billion (GBP£ 2.4Mln) and reduced foreign exchange outflow by $116 Million (Shs423Billion) by 2020.
He also said that in November 2022, “UBL launched a Shs17.6b logistics warehouse and empty hardstand facility. In January 2023, we opened a Shs40b production line that will increase its production capacity to 30,000 330 ml bottles per hour and 25,000 500 ml bottles per hour in the country.”
“These investments have strong linkages to other parts of the economy, creating demand for skills, inputs, manufacturing components, transportation, and storage. They also boost growth throughout a broader set of activities, including in the service sector. Currently, UBL employs over 800 employees and indirectly over 30,000 in the value chain, said Kilonzo.
On illicit alcohol, he said he commended the Government’s efforts in addressing illicit alcohol and was optimistic that a solution will be found soon.
“In Kenya, the President has put in place measures to curb illicit trade. The new Guidelines were released yesterday, March 6. I hope that we can do the same as illicit trade is a big problem in the region.”
