Another beer company warns Parliament against alcohol control Bill

ALCOHOL

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Another beer company has asked Parliament to go slow on the Alcoholic Drinks Control Bill 2023, saying it will affect revenue and employment generation in the country.

The Parliamentary committees on trade, tourism and industry, as well as health, are currently scrutinising the Bill introduced by Tororo District Woman MP Sarah Opendi.

The private member's Bill seeks to regulate the manufacture, sale and consumption of alcoholic drinks in Uganda.

Clause 14 of the Bill, intends to regulate the hours of sale of alcohol in Uganda, by proposing that all persons found selling alcohol beyond 10 pm on weekdays and midnight on weekends, should be fined shillings 20m or imprisonment for a period of 10 years or both.

However, presenting their positions on the proposed Bill, key sector player Uganda Breweries Ltd (UBL) opposed the provision saying it would greatly impact on the beer industry in Uganda.

In the Picture is Uganda Breweries Ltd (UBL) managing director Andrew Kilonzo appearing before the Parliamentary Committee on health. (Courtesy photo)

According to UBL, the proposed provisions will not only affect employment and revenue collections but also the tourism sector.

"The proposed sanction for contravention of this provision is disproportionate and excessive and will have unintended consequences of sending legitimate alcohol trade to black market and will create a breeding ground for corruption in a sector where open trade is already settled," Andrew Kilonzo, the managing director UBL, told MPs.

UBL's plea follows that of Nile Breweries Ltd (NBL), which also rejected the proposal to limit the time within which alcohol is sold in Uganda, and instead proposed to have bars start selling alcohol from midday and have no closure time.

The proposal was made by NBL head of legal and corporate affairs Emmanuel Njuki on Wednesday, December 20, 2023, while appearing before Parliament’s health committee, which is currently scrutinising the Bill.

UBL proposed that on the premise of alcohol consumption especially in bars, bars are allowed to sell alcohol from 12:00 noon to 3:00 am on working days and 10:00 am to 4:00 am on public holidays and weekends.

Kilonzo explained that limiting the time of sale of alcohol may not necessarily translate into people drinking less and thus might be redundant.

He added that the night economy which is majorly driven by alcohol, drives the Ugandan economy noting that such a law would greatly impact on the economy.

"A law that impacts the night economy negatively impacts the economy of the country where the alcohol sector contributes approximately 35% of tax revenues collected," Kilonzo said.

He added that tourists on holiday, will not be able to enjoy Uganda's beer brands on the market, due to the limited hours of beer sale.

Illicit trade

On their part, Nile Breweries Limited said passing into law the alcoholic drinks control Bill, presents a high risk of increased Illicit trade, which is already at 65%.

According to Njuki, this is so because most of the illicit alcohol is made under the guise of home brew.

"Regulate illicit alcohol production and trade as well. The formal sector is already regulated by Uganda Revenue Authority for taxes and Uganda National Bureau of Standards for quality," Njuki said.

Just like UBL, Nile breweries disagreed on the issue of limiting sale and consumption of alcohol saying it doesn't necessarily translate into people drinking less.

Employment

They also called for major amendments in the Bill, saying it would result in the loss of up to 1.3 million jobs in the country.

"This Bill is an attack on the jobs; over 1.3 million by the sector, impacting 6.3 million livelihoods this includes the entire value chain, manufacturers, grain farmers, distributors, bars and clubs," Njuki said.

In terms of revenue loss, the breweries noted that the Bill is an attack on the national treasury where over shillings a trillion in taxes is collected from the alcohol sector.

It should be noted that the sector contributes 35% of the country’s tax base.

If left in its current form, the breweries warned that the Bill would drive investors away from Uganda to more liberal countries.

Some of the committee members sided with the breweries saying what is important is sensitising Ugandans on the dangers of alcohol abuse as opposed to regulating the hours of sale of alcohol.

"We just need to educate Ugandans that overconsumption of alcohol is dangerous to their lives, not telling them to stop drinking at 10:00 pm, this has implications on jobs and the night economy of our country," Christine Ndwalana (Bukomansimbi North) said.

The finance ministry declined to give a certificate of financial implications to the Bill before it was tabled before Parliament for its first reading.

However, Speaker of Parliament Anita Among invoked Section 76 (4) of the Public Finance Management Act, 2015 for the Bill to be read for the first time after the Government failed to issue a certificate of financial implication within the required 60 days.