Chinese supermarkets deny local products shelf-space

March 12, 2019 in Business by Editor

Despite the buy Uganda build Uganda (BUBU) policy that requires local entities to buy Ugandan products that has been in place since 2014, small-scale manufacturers are reporting trouble getting space on to supermarket shelves.

Speaking to media this week through their umbrella Uganda Small Scale Industries Association USSIA, the entrepreneurs singled out Chinese retailers for denying them shelf space.

“Despite efforts to showcase Ugandan products, many of Uganda’s small and growing entrepreneurs, particularly women and youth who are engaged in the production and distribution of a variety of a variety of goods and services within the local supply chains have yet to fully benefit from supplying large supermarkets and retail shops,” said Ms Veronica Namwanje, USSIA’s Executive Secretary.

Most foreign-owned supermarkets simply don’t entertain small-scale producers while those that do, take long to pay, stressing the capital budgets of small producers. This has created a vicious cycle that makes it near impossible for MSME’s to break through to the next level says USSIA.

Moreover this is happening in tandem with the progressive displacement by large supermarkets, of small neighbourhood grocers that previously offered MSME’s reliable outlets. Chinese retailers have expanded aggressively in Kampala in recent years, setting up shop in the suburbs. But they mainly act as a conduit for Chinese products.

“A Chinese retailer will not even give you an opportunity to explain yourself; they simply shout no,no, no,” said Ms Dorothy Kimuli a small-scale agro-processor.

USSIA now wants parliament to pass a law that gives BUBU legal force so that it can be legally binding.

When it was first introduced in 2014, it was envisaged that 20pc of government procurement by value would be of local products and half the shelf space in supermarkets would be populated by local products. Half of local products would also conform to national standards while half materials used in production would also be locally sourced.

USSIA says this is yet to happen but even the small percentage of goods that meet national standards face rejection.

Retailer cite poor packaging but USSIA says the government needs to step in to support in-country manufacture of affordable packaging materials.

USSIA is also advocating for the deployment of commercial officers at all districts and to have all locally made products that meet standards to carry the BUBU mark and to ring-fence certain products for local supply.