In recent times, the Jinja-based factory has been in the press for all the wrong reasons, from conflicting with its employees to the state.
Recently, Uganda Revenue Authority got a whistleblower citing that Nile Breweries Limited has been using imported barley from Kenya and yet declaring that their beer is purely made from 100% locally grown barley.
The decision to import was a result of a shortage of local barley production on the local market because all the locally grown barley is consumed by the two brewing giants.
However, in a bid to continue to rake in high profits and evade paying the excise tax that is attached to all beers produced with imported barley, NBL decided not to declare the use of imported barley from Kenya, as this attracts 60% excise, while locally grown barley attracts 30% excise
Following the information at hand, URA has since launched an audit into NBL, their farmers, and NBL’s Agroways (grain holding partners). NBL guarantees a loan from the bank in order for them to buy barley on their behalf.
NBL has been claiming massive empowerment of local farmers by providing seeds, skills, and tools to support local production, and then farmers sell to aggregators (wholesalers who process the barley) and then sell to Agroways for NBL use. This scheme was partly set up to hoodwink the country’s tax collector, URA, and Adu Rando, the managing director of NBL, has been aware of the scheme for several years. URA moved in to audit the aggregators (Agroways) and interview them; however, NBL has been frustrating the process by dragging the meetings and trying to bribe URA investigators through one of their staff.
According to URA, NBL may have to pay penalties of approximately UGX 314 billion that may further cripple the company’s financial position, having recently lost an 18bn suit to URA for tax evasion. This was due to producing beer for export only, and they again sold it into the country. This further comes on top of problems of mass exit of employees from the company and massive loss of sales for their brands. The Managing Director has since been summoned at the company’s African headquarters in South Africa to explain how he has been operating these undercover schemes that have cost the company billions of shillings
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On the other hand, URA is considering writing to the president requesting his deportation, considering the number of tax evasion schemes he has been involved in. This is according to a source at the tax investigations department who spoke on conditions of anonymity.
The company has since hired motor-mouthed Muhereza Kyamutetera, who runs a media blog “The CEO East Africa,” to help deal with their PR crisis. This was financed and approved by the head of corporate affairs, Emma Njuki, but with all this, the centre can no longer hold. NBL must be on its downward trajectory.
