A report on the proposed 2023 Alcohol Bill tabled by Sylvia Nayebare, the Chairperson Trade and Tourism Committee of Parliament, has been dismissed following findings of the joint committees on Trade and Tourism that observed that the bill fell short of addressing the real challenges like illicit trade in alcoholic drinks, alcohol abuse, quality control, enforcement mechanisms, personal freedoms, economic impact, and efficacy of such controls, among others in the alcohol industry.
Whereas the Bill was expected to fill the gaps that were created by the repeal of the Enguli (Manufacture and Licensing) Act, Cap. 86, and the Liquor Act, Cap. 93, regarding the regulation of the manufacturing, sale, and consumption of native alcohol, to the contrary, the Bill sought to exempt the manufacture and consumption of illicit or native alcoholic drinks for domestic use from the application of the law.
MPs have asked the government to put in place a robust legal and regulatory framework with specific provisions to curb illicit brews, including native brews, which are increasingly becoming commercialized in Uganda.
This, was said during the discussion on the Alcoholic Drinks Control Bill 2023, in a session presided over by Deputy Speaker Thomas Tayebwa on August 13, 2024. The bill was rejected by Parliament after Attorney General Kiryowe Kiwanuka advised that it violated the 1995 Constitution.
MPs said illicit alcohol creates an unfair playing field for legitimate alcohol players since it does not pay related taxes.
“It is therefore critical that the government applies the right level of focus to curb significant problems of illicit alcohol trade in Uganda by putting in place a robust legal and regulatory framework with specific provisions to prohibit illicit alcohol, including native brews,” said Nayebare, who also doubles as Gomba Woman MP.
Quoting the 2021 Euro Monitor study on the illicit trade of alcohol in Uganda, she said that the regulated alcohol industry only accounts for 35% of all alcohol consumed in Uganda, while illicit alcohol accounts for 65%.
According to the report, commissioned by NiIe Breweries to assess the market size of alcohol beverages in Uganda, of the 110.6 million liters of alcohol in Uganda, 67.7 million are illicit, accounting for 52% of the alcohol beverage market share. Informal alcohol in Uganda is estimated at Shs2 trillion but is not monitored by the Uganda National Bureau of Standards (UNBS) or the alcohol content.
This presents a risk of increased illicit trade and an unleveled playing field for the legitimate or formal sector, which contributes over 30% to the total government revenue.
Illicit alcohol is any alcohol that does not fulfill official requirements, including payment of relevant taxes, necessary health standards and permits, and compliance with local laws and norms. In Uganda, illicit alcohol consists of three categories, illicit homebrew, illicit or illegal imports, and the sale of counterfeit and surrogate alcoholic beverages. Illicit alcohol homebrew is popularly known as Waragi, Malwa, and Tonto, and surrogate alcohol includes pharmaceutical alcohols such as ethanol. Illicit alcohol is a danger to society and the economy in many ways.
While presenting the report from the joint Trade and Health Committee, Nayebare said illicit alcohol not only poses serious health risks to its consumers but also denies the country much-needed revenue in the form of unpaid taxes.
“The Committee observes that under the Memorandum of the Bill, the Bill does not clearly state the problem that it is trying to cure. It is important to identify what mischief the bill intends to cure. The other question is whether the proposed regulation is the best course of action in the circumstances. The bill also does not indicate how it intends to eliminate illicit trade in alcoholic drinks.”
According to the Euro Monitor report, Ugandans shifted towards illicit homebrew, with the highest volume growth over 2017–2020 recorded due to low prices. The report also indicated 18.3% compound annual growth rate value market size of illicit alcoholic drinks increased from $77.8 million in 2017 to $56.8 million in 2020.
Impact of the bill on the tourism sector
According to the World Travel and Tourism Council (WTC), the tourism sector contributed $2 billion to the economy of Uganda in 2022. This is equivalent to 4.7% of the country’s GDP. In 2023, this contribution will increase to 5.5%. This is still $400 million less than what was contributed during pre-#Covid 2019.
The committee recommended that the tourism sector requires all the support it can to recover from the effects of #Covid-19, and the legal framework should support and not hurt the recovery of the sector.
The bill seeks to regulate the manufacture, importation, sale, consumption, and advertisement of alcoholic drinks; the time allowed for the sale of alcoholic drinks; the prohibition of the online sale of alcoholic drinks; the prohibition of the selling of alcoholic drinks packed in sachets and plastic bottles; and the stipulated places for the sale of alcoholic drinks.
The Alcoholic Drinks Control Bill was read for the first time on Tuesday, November 14, 2023, by Opendi Sarah Achieng, Woman Representative, Tororo District, and it was referred to the Joint Committee on Health and the Committee of Tourism, Trade, and Industry for consideration in accordance with Rule 129(1) of the Rules of Procedure of Parliament.
Attorney General’s Advice
The Attorney General, Kiryowa Kiwanuka, said that from the onset, the private member did not get the benefits of the assistance from the Attorney General’s Chambers as required by Article 94(4).
He said that the bill, in our view, offends Article 93(a)(2) of the Constitution, which provides that you shall not proceed with the bill that has a financial implication on the consolidated fund on an alteration of the same.
“That’s why Article 94 (4c) and Rule 121 of the Rules of Procedure require a member to get assistance from the department that manages the bill that is before the house. And from the reading of the majority report, you can actually clearly see that the implementation of this bill, if passed by the house, will have an effect on the consolidated fund,” said Kiryowa.
He added, So, for that reason alone, I will be moving that the bill be rejected by the House.” However, I wish to add that clause 1B of this bill actually contradicts the very purpose of this bill. This bill also creates another challenge, which is that it offends a number of laws that have been passed by this house.
