Uganda loses $172m through il­licit al­co­hol

East African Business Week - - FRONT PAGE - BY SAM OKWAKOL

KAMPALA, Uganda— Uganda loses US$172M about Sh­s616bn in taxes an­nu­ally to trade and pro­duc­tion of il­licit al­co­hol, a study re­leased by Euromon­i­tor In­ter­na­tional on the Al­co­hol Bev­er­age Mar­ket in Uganda 2015, has re­vealed.

“Il­licit al­co­hol pro­duc­tion is larger than le­gal pro­duc­tion in both vol­ume and value terms. Il­licit home­brew re­mains the largest cat­e­gory in vol­ume and value terms,” said Onapito Eko­moloit, Cor­po­rate Affairs Direc­tor, Nile Brew­eries. The study re­leased by Euromon­i­tor In­ter­na­tional in­di­cates that Uganda has a to­tal al­co­hol mar­ket vol­ume of 110, 647,900 litres of which the to­tal mar­ket vol­ume for licit/le­git­i­mate al­co­hol stands at 43,020,300 litres while 67,627,600 litres of il­licit al­co­hol ac­counts for the to­tal mar­ket vol­ume of al­co­hol in the coun­try. 63% of spir­its of the to­tal mar­ket vol­ume of al­co­hol on the Ugan­dan mar­ket is il­licit, only 37% of the to­tal mar­ket vol­ume of spir­its is le­git­i­mate. While 79% of wine/fruit wine is le­git­i­mate, 21% of wine/fruit wine is il­licit, and whereas 6% of opaque beer is le­git­i­mate, 94% opaque beer is il­licit. There­fore, il­licit spir­its and pow­ered opaque beer vol­umes are larger than le­gal pro­duc­tion. Sim­i­larly, the to­tal licit al­co­hol mar­ket value in Uganda stands at US$2,126M about Shs7.6tril­lion while the to­tal il­licit mar­ket value of al­co­hol US$676M about 2.4 tril­lion. Onapito said un­til now, lack of a con­sis­tent or proper en­force­ment, in­spec­tion and reg­is­tra­tion of traders and trans­ac­tions has al­lowed il­licit pro­duc­tion to flour­ish. “Au­thor­i­ties are now start­ing to ad­dress this. For ex­am­ple the tax­payer reg­is­tra­tion ex­pan­sion project has con­trib­uted to widen­ing the tax­payer base,” Onapito said. The study fur­ther re­veals that coun­ter­feit and il­licit brands are the largest seg­ment of the il­licit mar­ket. Coun­ter­feit pro­duc­tion ac­cord­ing to the re­port ap­pears in all seg­ments of the mar­ket. This was at­trib­uted to ac­cess to cor­rectly moulded bot­tles se­cu­rity clo­sures as a key en­abler and these are re­ported to be ei­ther smug­gles or gen­uine bot­tles that are re­filled. It’s re­vealed that ethanol and mo­lasses, ei­ther by prod­ucts of sugar in­dus­try (smug­gled into Uganda) feed much of the il­licit dis­tilled prod­ucts. The study high­lights that spir­its dom­i­nate the il­licit mar­ket with cus­tomers pre­fer­ring the high Al­co­hol Bev­er­age Vol­ume of a cheap prod­uct. The most com­mon dis­tilled spirit is Waragi, which al­though banned by law, is widely pro­duced and sold. The re­port found that there is a clear cor­re­la­tion be­tween af­ford­abil­ity and high rates of un­recorded al­co­hol. Wide­spread poverty, lack of gain­ful em­ploy­ment and a long cul­tural tra­di­tion of do­mes­tic pro­duc­tion of al­co­hol has con­trib­uted to­wards il­licit pro­duc­tion be­com­ing the main­stay of house­hold in­come in both ru­ral and ur­ban set­tings.

The to­tal licit al­co­hol mar­ket value in Uganda stands at US$2,126M about Shs7.6tril­lion while the to­tal il­licit mar­ket value of al­co­hol US$676M about 2.4 tril­lion.

Newspapers in English

Newspapers from Burundi

© PressReader. All rights reserved.