By Raymond Lokeris
After Kabaka Ronald Mutebi sent the announcement that reshuffled his cabinet, he drove to his Bamunanika Palace for the weekend. He summoned Katikkiro Charles Peter Mayiga there for a briefing. The meeting that lasted about four hours discussed among other things corporate partnerships. The Kabaka started off by thanking the Katikkiro for being innovative in raising money for the kingdom and then gave some guidelines according to our impeccable sources.
“The Kabaka asked Katikkiro Mayiga to review all the partnerships and see whether each of them still makes sense. He was very concerned about K2 Telecom’s partnership with Airtel Uganda,” a source said.
In 2018, Airtel made an agreement with Buganda to revive K2 and have it on its platform. The partnership meant co-branding of shops and providing a budget for both below and above the line advertising. The Kabaka is said to have told Mayiga that he doesn’t see a lot of promotions of K2 when he watches TV or when he reads newspapers. “Are they sticking to the agreement we have with them?” the Kabaka is reported to have asked Mayiga. “There is need to review what they are doing as well as the other partners especially Ngule Lager and Olwendo Mineral Water,” the source said quoting the Kabaka.
Fresh from Bamunanika and with the backing of his boss to steer the Kingdom to greater heights, Katikkiro Mayiga summoned his new cabinet and informed them of the need to review all strategic partnerships going forward. The K2 Telecom-Airtel partnership is top of the agenda. Sources in Bulange say MTN Uganda is interested in doubling what Airtel has been paying and pay them off and take over K2. However, insider sources say the Katikkiro is not yet convinced it is the right thing to do. “One of Katikkiro Mayiga’s major strength is the ability to keep his word. He is a strategic thinker so he doesn’t jump from one position to another but very firm when he makes the call,” the source close to Mayiga said.
Katikkiro has instructed his Second Deputy, Owek Waggwa Nsibirwa to spearhead the review and provide a comprehensive report before the end of March. Nsibirwa did as instructed and kicked off his reviews with Uganda Breweries, makers of the Kingdom’s Ngule Lager.
“Mark Ociti, the UBL Chief Executive and his marketing honcho Juliana Kaggwa spent Thursday afternoon last week at Bulange meeting Owek Nsibirwa,” our source added. In the meeting, UBL explained that taxes slapped on beers had led to a significant drop in market share of all brands of the cheap beers.
Because of taxes, beers like Ngule and Senator increased their RRP (recommended retail prices) from Shs1500 to Shs2200.
“The people who drink Tusker Malt don’t care about a small price increase after all they pay as much as Shs5,000 on average for a small bottle. Those who drink the cheaper brands, a price increase of Shs700 makes them resort to kavera (cheap gins),” Ronnie Musinguzi, a beer marketing expert told this writer. “Even Eagle Lager’s sales have plummeted by 50%,” another source told us. Eagle Lager has been the market leader in the cheap beer category.
However, what shocked the beer industry is that Ngule lost just 5% of their sales because of these taxes. “People love the Kabaka so they drink Ngule as a way of ensuring that the Kingdom gets the income. Everyone in the beer industry is shocked. That is why Ociti didn’t hesitate to jump into his Prado to Bulange when invited so that he sees how he can strengthen his partnership with Buganda,” Musinguzi added.
Next week, Nsibirwa will meet Emmanuel Katongole and his Vero Foods team who make Olwendo Mineral Water. “Olwendo’s biggest problem is demand—Vero hasn’t been able to produce as much as people demand and the Kingdom wants Katongole to present his strategy to avert this very good problem,” the source added.
Sources say the meeting with Airtel just like all the other partners is expected soon so that by the time the Kabaka celebrates his 64th birthday on April 13, K2 Telecom is realizing its potential. Will Airtel deliver what it promised or will MTN Uganda take this lucrative Buganda market? Only time to tell.
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