Pubs hardest hit, beer sales tumble

Ugandans’ appetite for beer has taken a tumble in the last six months, partly contributing to the tax body’s Shs175billion revenue shortfall.

Uganda Revenue Authority (URA) records show that (Value Added Tax) VAT and excise duty on beer altogether registered a shortfall of about Shs12.2 billion, due to dropping levels of beer sales.

Beer made from malt was also not spared as its revenue registered a decline of 30 per cent from Shs14.8 billion during the period of July – December the previous year to Shs10.4 billion during the same period this year (between July – December 2012).

“There has been a 9 per cent decline in the beer sales subsector between July to November 2012 compared to July to November 2011,” Ms Sarah Birungi Banage, the URA spokesperson said while announcing the half year revenue performance.

The tax body also attributed the dipped beer sales to an increase in VAT input tax due to expansion works of a major player (Nile Breweries) in the beer subsector. This is as a result of $8 million Nile Breweries plant under construction in Mbarara which reduced the net VAT paid.

However, sources in Nile Breweries said the plant is expected to be commissioned mid this year.
The Director of Corporate Affairs, Nile Breweries, Mr Francis Onapito Ekomoloit, said the sub-sector is a victim of the battered economy. He said: “The conomy slowed down and all consumer products suffered.”

But by December, the sales had started picking up.
Analysts say this is a spillover of the previous economic terrain that saw inflation hit record highs of 30.4 per cent and the exchange rate getting out of control—making the business envirnment difficult.

Attempts to obtain Uganda Breweries Limited’s position on the matter were futile as those who are mandated to talk to the press were out of office.