High Excise Duty on Bottled Water, poor production standards, weak trade agreement exempting COMESA members’ products, particularly processed juice imports from being charged Value Added Tax (VAT) necessitate government establishing and implementing a National Policy on Packaged and Bottled Water, to protect the industry and consumers in Uganda, it has been revealed.
To avoid crippling the juice and water sub-sectors, the beverage industry players under their umbrella body, the Uganda Water and Juice Manufacturers Association (UWJMA) held deliberations with the Minister of State for Trade, Hon. Michael Werikhe Kafabusa, the body said in a statement.
During the meeting at Farmers House, the State Minister said the Government recognizes the need for a clear policy as bottled water had become a very important commodity in the region and globally.
Hon. Kafabusa, said: “Cabinet did approve a Cabinet Paper in September and authorized the Ministry to finalise the National Packaged Water Policy. It is good that you have an Association and are ready to work with the Government to implement this Policy. We will work in tandem to make sure the industry grows, and that we get rid of counterfeit bottled water products and illegal players.”
He also received a brief on UWJMA activities from Chairperson Tony Gadhoke, Secretary Morgan Bonna, and Committee Member Simon Kaheru.
Hon. Kafabusa revealed that the Government would look into the concerns of legitimate manufacturers of bottled water, including harmonizing Excise Duties on their products.
“We may not remove the Excise Duty altogether, but we may phase it and harmonise it across the East African region because it makes business sense. We recognize that harmonising Excise duties will ease your costs of production and make Uganda more competitive regionally,” he said.
Uganda exacts a 10% Excise Duty on Bottled Water whereas Tanzania levies 5% and Kenya charges no tax on Bottled Water.
Association Secretary Morgan Bonna explained that the tax disparity put Uganda at a major disadvantage while allowing other countries to export bottled water to Uganda.
“You will find bottled water produced in other countries being sold on supermarket shelves in Uganda but our water here which is the best quality in East and Central Africa, cannot penetrate foreign markets. Until now the unofficial policy in Uganda considers bottled water to be a luxury product whereas we all know that water is life and is consumed by everybody,” he explained.
UWJMA Chairman Tony Gadhoke assured the Minister that the Association members were focused on producing safe, high-quality, regulated bottled water in the interest of consumers.
“Our consumers must get the best. Water is life, so it should be the best quality and all players must be regulated well. As an Association we are committed to our consumers and to growing the industry professionally so that we support business, which in turn supports the Government to deliver other services,” he said.
Committee Member Simon Kaheru said the Association would embark on a wide scale plastics recycling exercise to deal with environmental concerns from discarded water bottles. He highlighted the success of the Nakawa-based Plastics Recycling Industries which recycles used plastics and produces flakes that are exported to bring in foreign exchange.
“Plastics Recycling Industries will work with all Association members to establish and run more collection centres so that used water bottles do not find their way into landfills or into the environment, but are instead crushed and converted into raw materials for the production of plastic products for re-use,” he said.
The biggest soft drink producers are franchises of big international companies Coca-cola and Pepsi cola. Through their operations in Uganda, soft drink and bottled water manufacturers are supplying Rwanda, Burundi, South Sudan and Eastern Congo. In 2010, the Bill and Melinda Gates foundation committed $1.4bn to strengthen the agricultural value chain in Africa. By 2010, the fruit juice industry in Uganda had grown 300 per cent since 2005.
With the set-up of supermarkets in Uganda, bottled drinks are becoming increasingly popular with positive forecasts.
