Beverage industry suffers shs550bn losses due to Covid-19 lockdown

Players in the beverage industry have said they have lost over shs550 billion since the government announced a lockdown due to the Coronavirus that saw bars closed.

According to Herbert Kamuntu from Kachain Logistics who are distributors for Nile Breweries Limited,  the alcoholic beverage industry has an eco-system including distributors and retailers who are part of the value chain but have suffered greatly due to the lockdown.

“The prolonged closure of bar businesses and the impact it has had on us, as key players in the value chain is great. As distributors and retailers of beverages, our business significantly depends on supplying and distributing to bars and night clubs, whose businesses remain closed,” Kamuntu said.

“The continued closure of bars has had severe impact on our businesses leading to revenues of up to shs550 billion being wiped out. This situation continues to escalate as the bar closure drags on for more months.”

The distributors representing over 120 others said they employ over 1800 Ugandans countrywide with an estimated 9000 dependents that they said are now suffering due to the continued closure of bars and night clubs who are their clients.

“This number is even higher with spirits distributors which account for over 1,000 businesses and tens of thousands of employees and dependents,” Herbert Tumwesigye from Great Lakes regional distributors.

He explained that as beverage distributors, they are classified as small and medium enterprises which contribute up to 45% of the country’s total employment as well as making up to over 70% of the economy by contributing over 30% of the country’s GDP.

According to Tumwesgiye, they have been forced to downsize as well as laying off of employees due to the prevailing situation.

“This is not a decision made lightly and in effect, is contributing to the national unemployment burden. We also find ourselves in a situation where we face increased difficulty in meeting our credit and tax obligations.”

The distributors of beverages noted that the continued closure of bars as part of the measures to stop the spread of Coronavirus has put a big burden on both retail and distribution businesses that earn out of the same.

They asked government to reconsider the decision and reopen bars but under strict guidelines to be followed.

“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. We are therefore requesting government consideration to re-open bars and clubs across the country, with strict observance to COVID-19,”Godfrey Seruta from Premier Distributors said.

Whereas government has with time eased the Covid lockdown in which it has seen several restrictions removed, bars are still closed.

President Museveni recently said bars cannot be reopened because they attract big numbers of people who cannot control themselves after getting drunk.