Uganda Bottled Water Industry Policy in Offing: Water Safety and Tax are Concerns
As the safety of bottled water becomes a concern for many consumers, the ministry of Trade has embarked on a process that will formulate a policy to regulate the industry.
The absence of the Bottled Water Policy, has allowed unscrupulous individuals to penetrate the market with substandard water products, risking the health of unsuspecting consumers.
Speaking during an actualisation tour of Rwenzori Bottling Company, Ms Amelia Kyambadde, the minister of Trade said: “The reputation of those who are legally involved in the water business is at risk,” adding: “I know of people who don’t drink bottled water because they are not sure about it.”
Uganda’s bottled water industry has grown over the years, however, the industry has seen fake and substandard water products flourish in a small but rapidly growing market.
Ms Kyambadde said: “Uganda has a booming bottled water industry; however, it is under threat by increasing underground businesses that manufacture fake and substandard products.”
Uganda has about 40 registered water bottling companies with a number of others operating underground.
Mr Kirowi Suma, the Rwenzori Bottling company managing director, said the government was losing tax revenue due to the absence of a regulatory policy to guide the industry.
He said: “If the government was able to regulate the industry, it would collect taxes of about Shs2 billion, which is being evaded by the unregistered manufacturers.”
In addition to the challenge of unregulated manufacturers, Mr Suma said the industry is faced with a number of obstacles including the increasing cost of doing business, resulting from high inflation, currency depreciation and power outages.
Companies have since last year seen a drastic increase in the cost of doing business, exacerbated by high inflation, which peaked at 30.4 per cent in August 2011, heavy depreciation of the shilling and perennial power outages.
In a separate interview, Ms Kyambadde said she would call a meeting with all stakeholders to seek their input in the formulation of a Bottled Water Policy to regulate the industry.
About the Uganda Bottled water industry
Contribution in taxable income. Currently the water bottling industry contributes about Shs4.3 billion to the government annually.
Leading the market. Rwenzori Bottling Company is according to date, the market leader with a share of about 47 per cent. It contributes about Shs2 billion in taxable income annually. The 53 per cent is shared among other players.
Sales and consumption. Water sales amounting to Shs43 billion, according to data, are registered every year. Urban and semi urban areas are some of the biggest consumers of bottled water.
Water exports. Uganda exports some of its bottled water products to Rwanda, DR Congo, South Sudan and parts of Tanzania.
By Ismail Musa Ladu
The Monitor Newspaper