Uganda is a country in which the consumption of alcoholic drinks is frequent, heavy and widespread, to the extent that problem drinking has become a source of major social concern. Prior to the pandemic, economic development, rising income levels and the widening range of products on offer supported sales growth.
Sales of alcoholic drinks through bars, restaurants and hotels benefited from the full reopening of the economy in 2022. During the pandemic small local grocers and kiosks benefited from inflated sales but as restrictions have eased some consumers have migrated back to food/drink/tobacco specialists, supermarkets and drinking through the on-trade.
In 2022, both urban and rural consumers still preferred to buy alcoholic drinks from independent small local grocers and food/drink/tobacco specialists due to these retailers offering greater convenience. Most neighbourhoods have an array of shops, while there are also many local bars, kiosks and street vendors.
The alcoholic drinks industry plays an important role in the Ugandan economy, contributing significantly to tax revenue and employment, as well as supporting general economic development by sustaining farmers who grow the raw materials used in the manufacturing of beer. Nile Breweries is the second richest company in Uganda, after MTN Uganda, and invested USD200 million in the country during the review period.
Transporting alcoholic drinks is relatively easy in urban areas of Uganda such as Kampala, Wakiso, Mukono, Masaka, Jinja, Mbarara, Arua, Gulu, Mbale and Entebbe. This is because of the well-developed infrastructure in these parts of the country.
During the review period the government of Uganda took a significant step in its efforts to reduce the harmful impact of excessive alcohol consumption by banning the sale of alcohol in sachets. These plastic sachets were previously the most popular packaging format in spirits, and they were widely used by both mainstream and informal producers.
The Parliament of Uganda approved excise duty of UGX650 per litre or 30% (whichever is higher) on opaque beer, UGX1,500 per litre or 80% (whichever is higher) on ready-to-drink spirits, and UGX2,000 per litre or 60% (whichever is higher) on undenatured spirits made from locally produced raw materials. Meanwhile, the budget imposed a specific rate of excise duty of UGX2,000 per litre or 20% (whichever is higher) on wine made from locally produced raw materials and an increase in the excise duty rate applicable to other wines, from 60% or UGX6,000 per litre to 80% or UGX8,000 (whichever is higher).
In 2023, it is likely that the price of alcoholic drinks will continue to increase due to inflation which has resulted in the higher cost of fuel in Uganda. Other production costs may also rise and obtaining items such as packaging or glass may become more difficult.
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Alcoholic Drinks
Alcoholic drinks is the aggregation of beer, wine, spirits, cider/perry and RTDs.
See All of Our DefinitionsThis report originates from Passport, our Alcoholic Drinks research and analysis database.
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