Why beer prices remain high despite economic hardship, looking at COVID-19 vs the economy

Beer in Uganda and elsewhere is an alcoholic drink that is usually associated with good times and celebrations. In May 2022, Nile Breweries Limited (NBL) officially announced that they shall maintain the prices of their beer despite the hardships and economic pressures faced by all businesses across the globe including those in Uganda.

The brewery said this was a deliberate move aimed at enabling their consumers to continue enjoying their products as they continue to cope with the economic hardships induced by COVID-19.

As the economy gets battered even more by the increasing negative impacts such as inflation, the prices of beers have not been reduced by manufacturers to match with the tough times that greatly impact on their consumers’ disposable income.

“We understand that prices of most commodities, including the raw materials we use to make beer, have increased across the country. However, we also understand that Ugandans are still trying to recover from the upheaval that was the Covid-19 lockdown,” said Mr Onapito Ekomoloit, NBL’s Legal and Corporate Affairs Director in May.

NBL maintained beer prices
Mr Onapito Ekomoloit, NBL’s Legal and Corporate Affairs Director(PHOTO/Courtesy)

The company explained that since the economic hardships have hit everybody, increasing the price of their products would be foolhardy.

“We want to stand with all Ugandans during these hard times and get through them together where we can,” said Ekomoloit adding that; “ That is why we are maintaining our current beer prices despite market pressures and the increasing cost of production.”

NBL noted that the decision for maintaining the beer prices is not a guarantee that change in pricing will never happen.

The Luzira –based brewer states that the prevailing situation will always determine what they do.

“In the immediate future, our mission is to offer the best products to our consumers. We have been with them for years, we understand issues that affect them, and we want to move at their pace as they go through these hardships,” Ekomoloit noted.

However, NBL cautioned sellers against hiking prices for their products saying that the recommended retail prices have since been circulated on their social media platforms for the members of the public.

“We need all our sellers to respect the recommended retail prices and if you find anyone selling our beers at a higher than recommended prices or claiming that we have increased our prices, please inform us and we shall follow up,” said NBL’s Trade Marketing Manager Molly Horn.

NBL’s Trade Marketing Manager Molly Horn
NBL’s Trade Marketing Manager Molly Horn(PHOTO/Courtesy)

As the effects of the covid-19 pandemic raged on, one of the breweries announced an increase in a range of beers and spirits in May, 2022.

But every time there is such an occurrence, the retailers (bars and shops) tend to pass on the cost to the consumer by increasing the price of everything that comes from the distillers or brewery.

Although the increment came during a time of tough economic hardships induced by Covid-19 among other factors, it must be noted that this had an impact on Kampala’s nightlife.

In a report filed by Mr Emmanuel Ssejjengo, a lifestyle journalist, he established that the prominent bars within the city centre had not increased their beer prices.

He also discovered that most of the bars were already selling beer at Ugx 5,000 and above managed to retain their prices.

Among the places visited by the scribe on his quest to discover more included Ruby clubs such as Legends and Kyadondo both located in Lugogo.

These two sports hang-outs maintained their price tag of beer at Ugx. 5,000.

According to Ssejjengo, the revelers that flocked Legends on the weekend of Saturday, May 7, 2022 turned up to watch the rugby match between champions Heathens and their bitter rivals Kobs and it was full to capacity.

During this sports piece, the writer reveals how a full house of fans “was drinking beer in floods.”

“I had to leave Kyadondo early for a cheaper option in Luzira (Hive Bar). When I got there, they had also increased the price from Ugx. 3,500 to Ugx. 4,000. On Sunday, I prayed over Uganda’s beer prices,” said a regular at Kyadondo in an interview with Vision’s Emmanuel.

The reveler requested not to be disclosed owing to religious reasons.

More discoveries revealed that the price of beer at Fusion Eco Resort had also remained at Ugx. 6,000.

As people strive for healthy drinking, that obviously implies they have to eat more. Subsequently, more food tends to be demanded for in the form of among others roasted pork, beef and chicken.

In the journal, it was evident that; At Komamboga pork joints, it is common to drink in buckets; three beers bundled in a bucket used to fetch a price of Ugx. 10,000.

But that has since changed as a beer now costs Ugx. 4,000 and on Saturdays there is usually a notable alteration in drinking attitudes.

As is the norm in the bar sector, “making tables dirty” is a sign of extravagance and opulence which depicts the mood and level of generosity that revelers partake of the alcohol exhibit.

“For the one hour that we were there, there were not many green bottles (330ml). There were more of the brown bottles (500ml). The statement that was made was beer is beer. Or rather, the best beer is the cheapest,” wrote Ssejjengo.

Along Old Port Bell Road as you head to Luzira, there is a place known as Meat Packers which is popular for cheap beer. At this enjoyment spot, beer prices by May ranged between Ugx. 3,500 to Ugx. 4,000.

But even this slight difference of a mere Ugx. 500 can determine if a consumer remains or moves on to the next bar or hang out.

It is mostly those who come around for other business especially cattle dealers who tend to remain there for longer than most other people who flock the place.

According to Ssejjengo, “It was a weekend where folks got to know which class they belonged to. If your bar changed prices, you are a poor “drunko”, or rather of the drinking poor class. If your bar didn’t hike prices, you have arrived. Just pray you do not backslide.

Business Times Uganda

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