Alcohol traders seek bar re-opening to save their businesses

Since March, Ugandans have been nabbed drinking in secret hideouts and jailed for breaking Covid-19 lockdown measures. However, distributors of alcoholic beverages say it would be more beneficial to the economy if bars were officially re-opened.

Herbert Tumwesigye of Great Lakes, the distributors of Nile Breweries' products, said they were operating at 60% capacity. He said this was lower than the 85% operating level they needed to break-even. He was speaking at Kati-Kati Restaurant beside other distributors of alcoholic products.

Although he applauded measures set by the health ministry, such as the lockdown to curb the spread of Covid-19, Tumwesigye said due to the lower sales, he was forced to sack 40% of his staff.

"The continued closure of bars is a tremendous burden to the retail and distribution business, and while we are cognizant of the fact that the reopening of bars presents a risk to the wellbeing of the country, we believe a lot can be done in the way of a collaborative effort to ensure the safety and wellbeing of the public," he pointed out.

"We are, therefore, requesting the Government to consider reopening bars and clubs across the country, with strict observance of the COVID -19 public health standard operating procedures," Tumwesigye said.

He pointed out that the alcoholic beverages industry consists of an eco-system that includes distributors and retailers with about 120 business enterprises focusing on beer distribution countrywide, who, together, provide employment to 1,800 Ugandans with an estimated 9,000 dependents.

Tumwesigye noted that this number is even higher with distributors of spirits, who account for over 1,000 businesses and tens of thousands of employees and dependents.

"As distributors and retailers of beverages, our business significantly depends on supplying and distributing to bars and night clubs, whose businesses remain closed," he said.

"The continued closure of bars has had severe impact on our businesses, leading to revenues of up to sh550b being wiped out. This situation continues to escalate as the bar closure drags on for more months," Tumwesigye added.

Herbert Kamuntu of Kachain Logistics said a 40% reduction in sales was significant for his business and, consequently, he had laid off 20 staff, with only 30 still employed due to the local scale of operations.

Before the lock down set in, Uganda Breweries Limited, whose parent company is listed on the Uganda Securities Exchange (USE) as the East African Breweries Limited (EABL), had registered an 8% jump in halfyear net sales to December 2019.

The firm's results indicated that mainstream beer performed best, growing by 33%, driven by Pilsner and Bell sales. There was growth for Reserve (17%) due to Johnnie Walker sales, Premium beer (24%) due to Tusker Lite and Guinness sales Spirits sales grew 1% despite the ban on sachet alcohol.

Uganda's contribution to the East African Breweries Limited (EABL) group is 15%, second behind Kenya and just ahead of Tanzania. EABL posted a 9% jump in pre-tax profit to

Ksh10.6b (sh359b) for its first half to the end of December.

Meanwhile, the USE all-share index closed at 1,306.13, down from 1,328.45, while the Local Share Index closed at 332.25, up from 331.97. There were two active counters, namely Umeme and Quality Chemicals, with turnover closing at sh123,000.