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Alcoholic Drinks Control Law Will Crash Uganda’s Economy- Manufacturers

Manufacturers say the law only targets the regulated players

Uganda Manufacturers Association (UMA) has warned that any attempt to enact the Alcoholic Drinks Control Bill 2023 in its current form will likely crash Uganda’s economy.

The manufacturers argue that the law is targeting the formal sector that is regulated, while leaving the informal sector to produce illicit alcohol which is detrimental to the health of consumers.

The warning was issued by Allan Ssenyondwa, Director Policy Research and Advocacy at Uganda Manufactures Association, while appearing before Parliament’s Joint Committees of Health and Trade that are currently scrutunising the Alcoholic Drinks Control Bill 2023 that was tabled by Sarah Opendi (DWR Tororo).

“The country is highly informal in nature, and because of its informality, there is a high illicit trade, therefore whatever we try to do in this country, we must ensure that we are able to legislate for both the informal and formal sector. The bars in Uganda directly employ over 15,000 locals not counting the chefs, artists, boda boda cyclists who transport the people, touch alcohol and touch this whole sector and you won’t have enough money to appropriate in this Parliament,” Ssenyondwa said, adding: “Touch the sector, you will have to bear the consequences of touching these other areas. Don’t place undue burden on businesses or stifle the ability to innovate and grow.”

The Uganda Manufacturers Association also informed that the stringent laws and taxes imposed on manufacturers have seen over 41 of its members close shop in Uganda, in preference for other nations like Tanzania, and the provisions in the bill will likely drive more manufacturers out of Uganda.

“Our members of the manufacturing sector are slowly moving out of Uganda, we have evidence of over 41 factories setting up in Tanzania originating from Uganda. We have others on the borders of DRC, who are thinking it is better to produce elsewhere and bring to Uganda. We are losing industries, this is going to contribute to more loss of industries and we will come and say, we don’t have enough taxes, what will we say, again go back to these factories and say, please give us more Excise Duty and Value Added Tax what are we really trying to cure? These clauses are redundant and should be removed,” warned Ssenyondwa.

Ezra Muhumuza, the Executive Director, Uganda Manufacturers Association questioned the timing and motive behind the enactment of the Alcoholic Drinks Control Bill 2023, arguing that Uganda has been a market for alcohol since time immemorial and the fight against alcoholism is coming at the time the manufacturers have started to adhere to Government’s call to increase production Uganda.

“You wonder, consumption been there, why now? It is now when a report must come from somewhere that alcohol is indeed bad and we must start regulating manufacturing and consumption which we think can be improved. This market we all know has always been a control of imperialism and we know the tools of imperialism, we all see the Non-Governmental Organsiations (NGOs) around, and the full sinister and non-sinister agenda, we all don’t know or some do know for those who get interested,” Muhumuza said.

He dared MPs to take the anti-alcohol campaign back to their constituencies and see what impact it will have on their political careers, arguing that alcohol has been part of Uganda’s social fabric and efforts should rather be focused on the bahavioural aspect of alcohol abuse, instead of resorting to a new law.

“We as manufacturers, we ought to see what happens with the advance effects of consuming alcohol and we think excess consumption of anything has got adverse effects. We think that instead of extending a law, to look into behaviour and adverse effects, we would rather see how we can work with Government and we reduce this. I want to believe that all these MPs that you appreciate that alcohol is a social fabric in pour society, if you want to give it a try, try in your next campaign and say, I am not coming to a rally where there is alcohol, we will meet in this Committee and come with results,”  Muhumuza added.

The Association also rejected the provision in clause 5(5) of the bill that stipulated that as a pre-requisite for grant of license business premises will only be considered suitable if they are not within 400 metres within a school, a health facility, a residential area, place of worship and not situated at a fuel station seriously, with Ssenyondwa describing the provision as impractical and called on Parliament to delete the provision from the Bill.

“Last time I checked, the Constitution said, we are a liberal economy, so now we are moving away from liberalism and going to communism. Considering Uganda’s physical layout which places social amenities close to one another, this provision is impractical, the bill shouldn’t attempt to impose unforeseeable requirement. By confining operation to a restricted radius, companies may face challenges in recruiting, retaining qualified employees leading to potential skills shortages and decreased productivity,” he explained.

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