Opendi moves to kill night economy 

The proposed Alcoholic Drinks Control Bill, 2023, introduced by Tororo District Women’s representative Sarah Opendi, has sparked significant controversy with its provision to limit alcohol sales in bars from 5 pm to 10 pm on weekdays.

This clause, aimed at regulating alcohol consumption, has been met with strong opposition, particularly from stakeholders in Uganda’s night economy. Emmanuel Njuki, the country lead for legal and corporate affairs at Nile Breweries Limited, has voiced his concerns, emphasizing the crucial role of the night economy in driving Uganda’s overall economic activity.

He argues that any legislation adversely affecting the night economy could, in turn, have detrimental effects on the country’s economy. Njuki points out that the bill’s restrictions extend to nightclubs, which under the new law, would be limited to selling soft drinks and offering music, while the sale of liquor would be prohibited after 10 pm. He questions the enforceability of such a regulation.

Further, Njuki challenges the rationale behind the proposed time restrictions, arguing that limiting operational hours does not necessarily equate to reduced alcohol consumption. He raises concerns about the practicality and financial feasibility of enforcing these time limits, noting that effective enforcement would require significant resources and would primarily impact formal industry players.

This could inadvertently drive consumers towards illicit alcohol markets, given the less transparent supply chain in that sector. Njuki’s critique highlights the complexities and potential unintended consequences of regulating the alcohol industry in Uganda.

“If this law is passed in its current form, it would devastate the livelihoods of everyone in the sector, including those in formalized operations. It infringes on the rights of farmers who supply raw materials for licit alcohol production; we use sorghum, barley, cassava, and corn to manufacture alcoholic beverages,” he said.

Juliana Kagwa, corporate relations director at Uganda Breweries Limited (UBL), expressed support for regulating the alcohol trade, but voiced concerns about the current form of the bill.

“While we are open to the idea and necessity of regulating alcohol trade, we believe the bill lacks sufficient data on the socio-economic and financial impacts of implementing some of its recommendations. Some proposals, such as the operating hours for bars being capped at 5 pm to 10 pm on weekdays, seem impractical in the short or medium term,” she said.

“With the proposed law, I anticipate a decrease in production, consumption, and demand for our products, which could negatively affect employment opportunities and ultimately lower contributions to the national tax base. Our value chain includes about 190 distributors, 106,500 retail outlets, 970 direct employees, and 50,000 grain farmers. Each entity averages 28 employees, resulting in over 2,982,000 employees across the value chain. With each employee supporting an average of five dependents, this affects nearly 14,910,150 livelihoods across all employment categories,” she explained.

The combined contribution of distributors and retail outlets associated with Nile Breweries Limited (NBL) and Uganda Breweries Limited (UBL) currently stands at approximately Shs 5.509 trillion annually.

Kagwa also addressed concerns regarding the bill’s impact on micro companies: “If passed in its current state, the cost of production will rise for these companies, making it more challenging to achieve profitability, especially if they maintain the same price for alcohol as when sold in plastic bottles. An increase in price due to production costs might lead to decreased sales, a decline in business, and reduced revenue from these micro companies in the long run.”

Regarding environmental concerns, Kagwa stated, “Plastic bottles are not biodegradable and can take centuries to decompose. Discarded in landfills and water bodies, they contribute to the growing problem of plastic waste. Moreover, illicit alcohol is often packaged in plastic bottles. Banning plastic will help mitigate the negative impact of illicit alcohol. Therefore, we fully support this aspect of the bill.”

On November 14, 2023, Opendi, introduced a significant legislative proposal in the form of the Alcoholic Drinks Control Bill, 2023. This private members’ bill aims to comprehensively regulate various aspects of alcohol in Uganda, including its manufacture, importation, sale, consumption, and advertisement.

A key feature of the bill is its focus on restricting the accessibility of alcoholic drinks to individuals below 18 years of age and implementing measures to combat the illicit trade in alcoholic beverages. The journey of this bill began a year earlier when, on November 8, 2022, the Ugandan Parliament granted Opendi leave to introduce the bill.

Notably, the bill advanced to its first reading without a certificate of financial implication from the Ministry of Finance, Planning, and Economic Development. This certificate is typically necessary for bills with potential financial impacts on the state. The refusal of the Ministry of Finance to issue a certificate of financial implications for the bill posed a procedural challenge. However, this hurdle was overcome when Speaker Anita Among invoked Section 76(4) of the Public Finance Management Act, 2015.

This legal provision allowed the bill to proceed to its first reading in Parliament, despite the absence of the financial implications certificate. This development marks a significant step in the legislative process, underscoring the complexities and challenges involved in introducing and advancing private members’ bills in Uganda’s Parliament.

“Since the bill had surpassed the mandatory 60-day threshold, it was thus ready to be presented on the floor of the House,” she said.

The bill was subsequently referred to both the committee on Health and the committee on Tourism, Trade, and Industry for thorough scrutiny. Later, the Ministry of Finance issued the certificate of financial implications. The Alcoholic Drinks Control Bill, 2023, as tabled by Opendi, introduces stringent regulations for the manufacture, importation, and sale of alcoholic beverages in Uganda.

A key provision of the bill mandates that anyone involved in these activities must obtain a license. The responsibility for issuing these licenses falls to the town clerk, the Kampala Capital City Authority, and chief administrative officers. Each license, once issued, will remain valid for a period of 12 months from the date of issue.

Opendi has outlined specific operating hours for the sale of alcoholic drinks and native liquor under the proposed legislation. Licensees will be restricted from selling alcoholic beverages before 5:00 pm and after 10:00 pm on working days. However, more lenient operating hours are proposed for public holidays and weekends, allowing sales from noon until after midnight.

The bill also establishes severe penalties for non-compliance. Individuals or entities found guilty of contravening these regulations face substantial fines and imprisonment. Specifically, a fine of up to Shs 20 million or a prison sentence of 10 years, or possibly both, can be imposed for selling alcohol outside of the prescribed hours or operating without a license.

Furthermore, the bill stipulates that all alcoholic drink packages must include detailed information about their contents and health warning messages. Failure to comply with this packaging requirement could result in a Shs 10 million fine or a five-year jail sentence. The proposed legislation aims to regulate the alcohol industry tightly, with the goal of reducing alcohol-related harm and ensuring consumer safety. By setting these stringent rules and penalties, Opendi seeks to address various social and health issues associated with alcohol consumption in Uganda.

Clause 25 of the proposed Alcoholic Drinks Control Bill, 2023, as presented by Opendi, sets forth stringent penalties for the sale of alcoholic drinks to minors. The bill stipulates a hefty fine of Shs 40 million or imprisonment for up to three years, or both, for individuals convicted of selling alcoholic beverages to children under the age of 18. This provision underscores a significant effort to protect minors from early exposure to alcohol.

The bill also introduces restrictions on alcohol consumption in specific public settings. Upon becoming law, it would prohibit the sale and consumption of alcoholic beverages in public service vehicles and by law enforcement officers in uniform. Violations of this rule would attract a fine of Shs 4 million or imprisonment for up to six months, or both, reflecting a commitment to maintaining public order and safety.

Furthermore, the bill mandates strict verification of age for alcohol purchases. Vendors are required to confirm that buyers are above the legal age of 18. In cases where a buyer’s age is uncertain, the bill allows for age verification through official documents like a national identification card, a passport, or other documents as may be prescribed by the minister. Failure to comply with this provision, resulting in the sale of alcohol to a minor, would lead to severe penalties, including a fine of up to Shs 40 million.

These measures within Opendi’s bill are part of a broader strategy to regulate alcohol sales and consumption, with a particular focus on safeguarding minors and maintaining public decorum. The bill reflects a comprehensive approach to addressing the social and health challenges associated with alcohol abuse in Uganda.

Opendi introduces specific regulations regarding the packaging of alcoholic drinks in Uganda. One of the key provisions in the bill is the prohibition of packing, importing, or selling alcoholic drinks in sachets, plastic bottles, or similar forms. The rationale behind this restriction is likely to address issues related to environmental pollution and public health concerns associated with such packaging. Violation of this regulation is considered a serious offense, attracting a fine of Shs 20 million or imprisonment for up to five years.

Additionally, Opendi’s bill sets a minimum packaging size for alcoholic drinks. It states that alcoholic beverages should not be packed or imported in containers smaller than five hundred milliliters. This measure seems aimed at curbing excessive alcohol consumption and controlling the availability of alcohol in small, easily consumable quantities. Non-compliance with this stipulation is met with severe consequences, including a fine of Shs 5 million or imprisonment for a duration of five years.

These provisions reflect a concerted effort to regulate the alcohol industry more stringently, focusing on how alcoholic products are packaged and distributed. Such measures are intended to promote responsible drinking habits, reduce environmental impact, and mitigate the risks associated with alcohol abuse.

Illicit Alcohol

The 2020 Economic Development in Africa Report, published by the United Nations Conference on Trade and Development (UNCTAD), highlights a significant economic challenge faced by the continent: illicit trade. This report states that Africa incurs an annual loss of approximately $88.6 billion due to illegal trading activities. In Uganda, the impact of this illicit trade is substantial, with the country losing around Shs 50 billion each year.

A significant portion of this loss in Uganda is attributed to the alcohol market. According to data, about 65% of Uganda’s alcohol market operates outside the formal economy. This segment is neither registered nor certified, and it does not contribute to the government’s revenue through taxes. The illicit nature of this market poses serious health risks to consumers, as these unregulated products do not meet the safety and quality standards set by authorities.

Furthermore, the 2021 Euro Monitor International report indicates a worrying trend in Uganda’s alcohol consumption patterns. It shows that the consumption of illicit alcohol has risen to 64.7 per cent. This increase not only exacerbates public health concerns but also undermines the economic development of the country. The prevalence of illicit alcohol consumption diverts potential tax revenue away from government coffers, which could otherwise be used for public services and development projects.

These reports underscore the urgent need for effective regulation and enforcement in the alcohol sector to curb the proliferation of illicit trade. Such measures would not only protect public health but also bolster Uganda’s economy by ensuring a fair and regulated market that contributes to national revenue.

Uganda’s worrying levels of alcohol consumption

The World Health Statistics 2023 Report places Uganda among the top countries worldwide in terms of alcohol consumption rates. According to the report, Uganda’s annual alcohol consumption per capita stands at 12.2 liters, a figure significantly higher than both the average for the African region, which is 6.3 liters and the global average of 6.18 liters, as reported in the WHO’s Global Status Report on Alcohol and Health in 2018.

Seychelles ranks just behind Uganda in terms of alcohol consumption. In Seychelles, the average annual consumption amounts to 11.99 liters of pure alcohol per man and 4.72 liters per woman. Tanzania follows as the third highest, with an average annual consumption of 10.36 liters per person.

The high rate of alcohol consumption in Uganda is a cause for concern, particularly because of the associated health risks and social and economic implications. The harmful use of alcohol in Uganda contributes to a substantial disease burden, affecting both individual health and the healthcare system. Moreover, the social consequences of excessive alcohol consumption, such as family and social disruption, and economic consequences like lost productivity, compound the problem.

These statistics underline the urgency for effective public health strategies and policies in Uganda to address the issue of alcohol abuse. Such measures are crucial not only for reducing the health risks associated with excessive alcohol consumption but also for mitigating its broader social and economic impacts.

Opendi shelved Nambooze’s bill in 2016

On October 5, 2016, Mukono Municipality MP Betty Nambooze Bakireke introduced a private members’ bill to parliament: the Alcoholic Drinks Control Bill 2016. The bill faced resistance from the government, though it had gained popularity among female legislators and some male MPs.

In a recent interview with NBS TV, Nambooze reflected on the bill’s journey: “When Sarah Opendi was still in the Ministry of Health, I wanted to present a Member’s Bill on alcohol. It was taken for review, but despite my inquiries about its progress, there was none. Now Opendi has presented it to the House. I don’t mind, as our goal is the same – to regulate alcohol.”

A 2018 report titled “Labour Market Information Status Report for Uganda” highlighted the employment significance of the accommodation and food services sector, which includes bars. This sector employed 442,400 Ugandans. The implementation Opendi’s recommendations in the bill, particularly regarding restricted operating hours for bars, poses a risk of job losses. With bars operating mainly from 5 pm to 10 pm, there is a likelihood that bar owners may reduce their workforce due to these constrained hours.

In the financial year 2022/23, the Uganda Revenue Authority (URA) collected 1920.6 billion in local excise duty from a range of 25 products and services, including 13 gazetted items. Alcohol was identified as a major contributor to the URA’s excise duty revenue. The implementation of Opendi’s proposals in the Alcoholic Drinks Control Bill could significantly impact government revenue collection, considering the crucial role alcohol plays in excise duty contributions.

Reaction to Opendi’s law

Dr Timothy Batuwa, the shadow minister for Health, has articulated his perspective on the Alcoholic Drinks Control Bill, 2023, focusing on the challenges Uganda faces due to irresponsible alcohol consumption.

“Alcohol is a recreational product manufactured for relaxation, and its use generates tax revenue. However, it should be consumed responsibly. I am particularly concerned with ensuring it is not sold to those below 18 years and regulating the places and times for its consumption,” he said.

Dr Batuwa emphasizes the importance of responsible drinking and expresses support for the bill, particularly for aspects that contribute to public health. Emmanuel Njuki, the Country Lead for Legal and Corporate Affairs at Nile Breweries Limited, acknowledges the need for regulation in the alcohol industry. However, he insists that such regulation should be fair, balanced, and sustainable, taking into account the interests of various stakeholders.

He advocates for a review of any regulation that imposes unquantified costs on businesses, suggesting that these costs should be either removed or minimized. Njuki also raises concerns about the bill’s approach to licensing, describing it as cumbersome and a potential avenue for corruption.

He argues that this could hinder the effective fight against the already prevalent illicit alcohol trade, which constitutes about 65% of the market. Njuki contends that the bill, as it stands, could inadvertently undermine the formal alcohol industry. He suggests that the bill should focus on regulating the production and trade of illicit alcohol as well.

Furthermore, Njuki challenges the assumption that limiting operational hours for alcohol sale would lead to reduced consumption. He points out that enforcing such time limits would be costly and mainly affect formal industry players. This could potentially drive consumers towards the illicit alcohol market, given its opaque supply chain, thereby counteracting the intended purpose of the regulation.

These perspectives underscore the complexity of regulating the alcohol industry. While there is a consensus on the need for regulation, opinions diverge on the approach and extent, highlighting the need for a balanced and effective regulatory framework that addresses public health concerns without unduly impacting the industry.

Baaya Isaac, a consumer of alcoholic drinks, has expressed skepticism about the Alcoholic Drinks Control Bill, 2023, suggesting that it was introduced in bad faith. He argues that while the alcohol sector is a significant contributor to Uganda’s tax revenue, over-regulation could severely harm this industry. Isaac points out that Uganda faces more critical challenges, such as corruption, poor healthcare services, and inadequate road infrastructure, particularly during the rainy season. He believes that the government should prioritize addressing these pressing issues rather than imposing stringent regulations on a sector that consistently pays taxes.

Isaac acknowledges Uganda’s high rank in alcohol consumption but advocates for a more balanced approach to regulation. He suggests that efforts should focus on combating the sale of illicit alcohol and promoting the export of alcoholic beverages. While he supports certain aspects of the bill, like the criminalization of selling alcohol to minors under 18, he cautions against excessive regulation.

Similarly, Shaka, the communications officer at Catwalk Lounge Kololo, raises concerns about the potential impact of the bill on the bar industry. He warns that the proposed regulations, especially those pertaining to the operational hours of bars, could force many bar owners out of business, resulting in significant job losses, particularly for those without formal qualifications. Shaka emphasizes that bars are substantial contributors to government revenues, paying taxes amounting to over Shs 1 trillion.

He fears that restricting the hours of operation could lead to decreased alcohol consumption, adversely affecting tax revenue collections.
These viewpoints highlight a common concern among stakeholders in the alcohol sector: while regulation is necessary, particularly for public health and safety, it must be balanced to avoid unintended negative economic consequences. The challenge lies in finding a regulatory middle ground that addresses public health concerns without unduly hampering an industry that is a vital part of the national economy.

Joshua Kayongo, the owner of Vibes Lounge and Bar on Tula-Bombo Road, voices significant concerns about the Alcoholic Drinks Control Bill, 2023, particularly regarding its impact on business revenue. He points out that their establishment earns most of its income during peak hours, which extend beyond 10 pm. Kayongo fears that if the bill is passed, the imposed restrictions could force him to lay off a substantial portion of his staff, exacerbating youth unemployment and potentially leading to the closure of his business.

Timothy Muhwezi, manager of Nina Lounge and Bar in Kawempe Tula, echoes similar concerns. He believes that the proposed law unfairly targets bar owners and could have detrimental effects on the night economy. The limitations on operating hours, he argues, would not only impact the businesses but also affect the livelihoods of those employed in the industry.

Adolf, the manager of Happy Boyz Bar in Kawempe, also opposes the suggestions put forward by Sarah Opendi. He warns that limiting operating hours could result in staff layoffs and significant financial losses. This would not only affect bars but also businesses that operate as restaurants, potentially reducing government tax revenue.

A patron of the bars, known only as Sarah, suggests that the proposed restrictions could foster corruption and illicit trade, similar to what was observed during the COVID-19 pandemic. She notes that the suggested operational hours would disrupt business and lead to a decline in sales, especially during the lucrative late-night hours.

Hashim, an accountant at Liquor Shed Bar in Kamwokya, adds that the implementation of the bill would particularly affect bar owners. He explains that business tends to be slow during the early evening hours and only picks up later at night. The proposed restrictions would therefore significantly impact the typical business pattern of bars.

These perspectives from various stakeholders in the bar and nightlife industry in Uganda highlight the apprehension and potential negative implications of the proposed Alcoholic Drinks Control Bill, 2023. The concerns center around reduced income, increased unemployment, and the broader impact on the night economy and government revenue, underscoring the need for careful consideration and a balanced approach in legislative decision-making.

UK scrapped midnight drinking rule. The UK’s “24-hour opening hours” policy, commonly known as the midnight drinking rule, was abolished in 2003 for various reasons. Critics argued that it encouraged binge drinking and alcohol-related violence, particularly late at night. Conversely, some viewed the rule as outdated and restrictive, hindering nightlife and business growth.

In response, the government sought to strike a balance between promoting responsible drinking and maintaining a vibrant nightlife. It opted for flexible licensing hours, allowing individual premises to determine their own operating times rather than imposing a nationwide curfew. This change aimed to give local authorities and pubs the autonomy to adapt their services to the needs of their communities, leading to a more sophisticated approach to managing alcohol consumption.