Alcoholic Drinks in Uganda

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. The government has sought to address these issues and recover lost tax revenues due to the prominence of unlicensed illicit alcohol via the June 2019 ban on sales of spirits in sachets.

Market insight: COVID-19 impact

Although sales of beer, wine and spirits are likely to have come under considerable pressure due to the COVID-19 pandemic during 2020, volume growth rates are expected to have remained positive in both the on-trade and off-trade channels in all categories of alcoholic drinks over the course of the year. While growth rates have been revised downwards in all categories to reflect softer demand due to the impact of the pandemic situation, it is expected that sales of alcoholic drinks will have continued to increase as economic development and the spread of more modern lifestyle habits continue to support rising consumer demand.

Country insight: COVID-19 impact

The global COVID-19 pandemic was confirmed to have reached Uganda in March 2020. In response, the government introduced a lockdown and movement restrictions, including a strict 19.

Country insight: Pre-COVID-19

Drinking alcohol is widely socially accepted in Uganda and acceptance of alcohol consumption is growing. However, there is growing concern about the impact of excessive alcohol consumption on the personal finances and health of the population, as well as the capacity for alcohol to lead to violence and other social problems.

Socioeconomic trends

Disposable income levels remain low in Uganda. While Uganda has consistently made significant progress in dealing with poverty since the 1980s, at the end of the review period 22% of the population was still living below the international poverty line of USD1.

Logistics/infrastructure

Transporting alcoholic drinks is relatively easy in urban areas of Uganda such as Kampala, Wakiso, Mukono and Entebbe. This is because of the very well-developed infrastructure in these parts of the country.

Legislation

2019 saw the government of Uganda take 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.

Taxation and duty levies

According to the budget for the financial year 2018/19, 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).

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