State Minister David Bahati, overseeing Industry at the Ministry of Trade, Industry, and Cooperatives, recently visited Uganda Breweries Limited (UBL) in Luzira to address the concerning issue of illicit alcohol production and sales. During this visit, he expressed his commitment to working alongside UBL and other stakeholders to tackle this challenge, which results in significant losses in government revenue due to uncollected taxes.
The gravity of the issue was underscored by the 2021 Euromonitor Report, which revealed that illicit alcohol commands a staggering 65% market share in Uganda. Annually, the government loses approximately UGX 600 billion in taxes due to the production and sale of illicit alcohol.
Minister Bahati emphasized the dual nature of the problem, highlighting its adverse effects not only on government revenue but also on public health. He cited a tragic incident in Arua where 28 people lost their lives after consuming illicit alcohol, underscoring the dangers associated with such products.
Bahati stressed the importance of ongoing vigilance by the Uganda National Bureau of Standards (UNBS) even after granting certification. He emphasized the necessity for regular monitoring to ensure compliance with standards and regulations.
Furthermore, the Minister commended UBL for its alignment with the government’s objectives regarding import substitution and export promotion. He recognized UBL’s efforts in these areas as crucial for supporting local industries and driving economic growth.
The National Development Program (NDP) III prioritizes import substitution and export promotion to foster labor-intensive manufacturing, create job opportunities, and facilitate technology importation. These initiatives aim to empower the youth and stimulate economic development across various sectors.
Andrew Kilonzo, Managing Director of UBL, elaborated on the company’s contributions to import substitution. Since 2017, UBL has collaborated with Kakira Sugar to produce high-quality neutral spirit locally, thereby reducing reliance on imports. This strategic partnership has not only enhanced government revenue but also reduced foreign exchange outflows significantly.
Kilonzo highlighted UBL’s recent investments in infrastructure and production capacity expansion, including the establishment of a logistics warehouse and production lines. These investments have generated positive ripple effects throughout the economy, stimulating demand for skills, inputs, and services.
Regarding illicit alcohol, Kilonzo expressed appreciation for the government’s efforts to address this pressing issue. He expressed optimism that collaborative measures, similar to those implemented in Kenya, could effectively combat illicit trade in the region.
In Kenya, the President recently implemented measures to curb illicit trade, signaling a proactive approach to tackling the problem. Kilonzo’s reference to these developments underscores the need for coordinated action across East Africa to mitigate the adverse effects of illicit alcohol trade.
