Farmer suppliers of sorghum, barley, maize, and cassava to alcohol manufacturers are worried that once the Alcoholic Drinks Control Bill 2023 is passed, it will threaten their way of life and their economic stability.
“As you may already be aware, the regulated alcohol value chain is one of the largest job creators in Uganda; from the farmers that produce the grains right up to the Bar and retail outlets,” said Henry Magara Musinguzi, the chairman of Kahungye-Butanda Barley Farmers’ Association in Kabale District.
According to official statistics, the alcohol industry engages over 53,750 grain farmers which accounts for 7% of the direct employment in the industry with 322,500 livelihoods supported.
On an annual basis, the breweries spend over shs200 billion in farming communities.
While interfacing with the Parliament’s Committee on Health, Tourism, and Trade which is scrutinizing the Alcoholic Drinks Control Bill 2023, Magara said that limited hours of operation for bars and other entities as provided in the proposed legislation will lead to decreased demand and procurement of grains and other raw materials by the brewers.
“With reduced operating hours, bars may experience lower sales, leading to a decline in the consumption of alcoholic beverages. As a result, grain farmers who supply raw materials for brewing may face a reduction in orders and sales from breweries and distilleries.”
He added that the ripple effect of reduced demand for raw materials would result in reduced employment opportunities, not only for farmers but also for their employees and suppliers.
“A decrease in demand for grains used in alcoholic beverage production can result in lower revenues for farmers who rely on these crops as a significant source of income.”
Onapito Ekomoloit, the Patron Uganda Alcohol Industry Association (UAIA) said that the alcohol industry is open to regulation but urged that such regulation should be fair, balanced, evidence-based, and workable, taking into consideration the interests of all stakeholders.
He said that regulation that introduces unknown and unquantifiable costs to business should be reviewed for its impact on all value chain players whose livelihoods depend on the alcohol sector as well as its overall socio-economic impact on the economy, and any such costs should be removed or minimized.
“A detailed regulatory impact assessment should be conducted to understand the impact of the proposed law on stakeholders including the value chain players whose livelihoods depend on the food, beverage, and entertainment sector, and such costs should be removed or minimized,” said Ekomoloit.
He added that the bill should address the problem of illicit by putting in place robust provisions to regulate the risk areas such as informal alcohol which is increasingly becoming commercialized without being subjected to production standards and payment of taxes.
Quoting the 2021 Euromonitor Report on Illicit Alcohol in Uganda, Jackie Tahakanizibwa, the UAIA General Secretary said legal alcohol only accounts for 35% of the total volume of all alcohol consumed in Uganda while illicit alcohol accounts for 65%.
“In Uganda, illicit alcohol consists of three categories; illicit homebrew, illicit/illegal imports, and counterfeit alcoholic beverages with the most common homebrews including waragi, malwa, and tonto,” she stated,
“Illicit alcohol poses great health risks to those who consume it. Regulated alcohol manufacturers adhere to the highest international standards for the health and safety of consumers with various measures including carrying an indication of alcohol content (ABV) and standard packaging. On the other hand, illicit alcohol producers can’t measure alcohol content thereby posing serious health risks.”
