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 government billions in lost taxes.
He said this 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 government loses about shs600billion in taxes through the manufacture and sale of illicit alcohol.
“As government, 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, adding that there’s a need for regular monitoring and to see compliance levels.
He also applauded UBL for backing government’s program 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 shs 13 billion and reduced foreign exchange outflow by $116 Million shs423 billion by 2020.
He also said that in November 2022, UBL launched a shs17.6 billion logistics warehouse and empty hardstand facility and in January 2023, they opened a shs40 billion production line that will increase its production capacity to 30,000 330ml bottles per hour and 25,000 500ml bottlers 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 and I hope that we can do the same as illicit trade is a big problem in the region.”
