Degemu Tamrat, 35, owns a small liquor store, commonly known as a grocery, in Gergi, Bole District around Mebrat Heil. Despite his fifth-grade education, he has always aspired to greatness. He started off waiting tables for a mere 200 Br a month but he was unable to live off such a small salary and he decided to venture out on his own.
He borrowed 16,000 Br from his friends to open a butcher shop and after awhile he was able to start earning enough money to sustain himself. He got married and had a son and, yet again, the money he was earning became too small to cover his expenses. After he had paid off his debts to his friends, he began saving his money, in the hopes that he would be able to invest it in something that would earn him a larger income.
He opened his liquor store business two years ago after he had saved up 150,000 Br from his butchery. Watching the other liquor stores and bars in his neighbourhood, he had gotten the impression that it was a good money earner and that it would help him earn a consistent living to support his wife and child.
But he was in for a rude awakening. All the money and effort that he had invested were for naught. Just a few short months after he opened; his grocery, like many around town was filled with boxes of empty bottles clinking against each other.
Like most liquor distributors and grocery owners across the country, Degemu has been affected by limited liquor supplies from factories. Though the retailer does not know the cause of the shortage, there has been a gap in the supply-demand chain of molasses in the country.
“There are empty spaces on shelves which are large enough to accommodate at least five cases of alcohol” Degemu told Fortune. ‘‘It was a really bad time to join the liquor business.’’
In 2010, the Ethiopian government restricted the use of molasses produced by the three sugar factories in the country, ordering that they primarily be used for ethanol production.
Although the decision of the government helped the country save close to 50 million dollars annually, the limited molasses supply, which is the main ingredient for alcohol production, affected most liquor factories.
Molasses was available from Wenji, Metehara and Fincha sugar factories, until 2010. When the restrictions were put in place by the government, Wenji and Fincha diverted their molasses for ethanol production to mix with benzene so that they would be in compliance with the regulations. Metahara was the only one of the three that provided some of its molasses to alcohol factories.
Ethiopiahas envisaged increasing its ethanol production to 182 million litres by the end of the Growth & Transformation Plan (GTP) which ends in the 2014/15 fiscal year. The target is to increase the ethanol blend to 25pc from the current level of 10pc.
This forces the liquor factories operating inEthiopiato import molasses fromBrazilandPakistan, at higher prices.
At the time a tonne of molasses was sold at 90 dollars on the international market. However, as global sugar production increased, the price of molasses, which is the by-product of sugar started to decline.
Currently, the price of molasses stands at 50 dollars a tonne.
This global price decline has brought some semblance of relief to most liquor distributors and grocery owners like Degemu. Liquor factories had finally answered their prayers and started producing at full capacity. The shelves were full, and bars buzzing with patrons able to get whatever brands and spirits their taste buds wanted.
Degemu, who only sells the product of National Alcohol & Liquor Factory to his customers, started to fill his grocery shelves with different kinds of alcohol. FromCognacto Gin and Aperitifs to Ouzo, at that time Degemu no longer questioned his own decision to branch out into selling alcohol
“It was shortly after last Christmas that things finally starting getting better,” said Degemu. “Finally, the supply of different alcohol products improved.”
The same opinion was also echoed by many grocery owners like Wondesen Zewdu. Wondesen owns a popular liquor store in Adama (Nazerth) town, Oromia Region. He only carries the products of National Liquor & Alcohol Factory, a household name in local alcohol production. His grocery and the products that it offers are so well known that it has even taken on the name of the factory that made Wondesen’s business so popular. It is known as National, his customers new and old are brand loyalists.
Last year, Wondesen was facing the same issues as Degemu. His shelves were empty and some of his normally packed seats were gathering dust. His situation was particularly worse because he could not come to Addis Abeba on a daily basis in hopes of getting a few boxes from the National factory. He spent a lot of his time waiting in hopes that he would get a trickle of the supply he once had.
“Last year was really bad,” said Wondesen. “If I didn’t have an established customer base, I am sure I would have gone out of business.”
This year, his shelves are not as bare as they were. His customers have come back to their second home, and the vibrant atmosphere is now back at National Grocery. This has made him breathe a sigh of relief.
Kokebe Kumbi Marketing Department head at the National Liquor & Alcohol Factory, accepts that there is a limited supply of molasses though she only sees this as part of the problem hindering the factory’s production.
“It’s true that molasses supplies were low,” she told Fortune. “But the shortage can not only be blamed on that; there has been a huge increase in the demand for our products, particularly in urban centres.”
Kokebe added that the factory was now producing and distributing enough alcohol for the whole country.
Sinkinesh Tela’s shelves are a testament to this. When Fortune first talked with her during last year’s New Year holiday season, she was lined up amongst hundreds of others outside National’s factory in the hopes of getting her hands on any liquor she could.
Her long hours of waiting were rewarded with a single box of alcohol that held the dominant spot on her empty shelves. Her small grocery near the Armed Forces Hospital (Tor Hayloch) now holds three full boxes that she did not have to wait in line to get. She also knows that if she were to need more, National would now be able to supply it.
“It is not like we can buy truckloads, but at least the shortage is nothing like the way it was last year,” Sinkinesh told Fortune. “We can at least serve our customers well this holiday.”
Degemu’s grocery shelves are now sparkling with bottles filled with the precious liquid that he was once struggling to obtain. He had ten bottles ofCognac, seven bottles of Areke, 45 bottles of Aperitif and 15 bottles of Gin, when Fortune went to talk to him.
“I don’t really know what’s different, but in the last two months the supply has seen considerable improvements,” said Degemu. “Though it is nothing like it was two or three years ago.”
Ten years ago, the per capita alcohol consumption of the nation was close to 2.3 litres of pure alcohol, according to the World Health Organization (WHO). However, this increased to close to five litres in 2010.
In order to satisfy the huge escalation in demand, National plans to produce 5.6 million litres of alcohol in the current fiscal year. This is a 33pc increase when compared to last year’s production of 4.2 million litres by the factory.
The factory has also increased its production by an annual average of 12pc, over the past 10 years.
National, has nearly ten products which it is currently supplying to the national market. Its spirits lines include Baro Gin, Ouzo, Double Ouzo, Fernit, and Bitter.
Other than National, the major liquor distillers inEthiopiainclude Asnake Alcohol Drink Industry, Balezaf Alcohol & Liquor Factory Plc and ERIGB International Plc.
As the production capacities of these liquor factories increases so does the stability of the price of alcohol; something that has been increasing dramatically over the last couple of years.
Balezaf produces 20,000lt of liquor, a day, including; Uzo, Gin and Spearmint. The company has been producing at 30pc capacity, since February, 2012.
Currently the price for a bottle of National and Balezaf’s product is sold at 53 Br and 52 Br, respectively. Compared to last Christmas, the prices have only increased by five and three birr.
Degemu sells a bottle of alcohol for 60Br.He sells a double shot for eight Birr and makes a profit 80 to 100 Br from a single bottle. This is because one bottle has 29 double shots of alcohol.
“The increment in the price of the locally produced alcohol available on the market is fair,” said Degemu. ‘‘Regardless, the supply is still not enough’’.
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