By PETER OKONG’O
NAIROBI, KENYA: Has the Government lost the war on illicit brews? The latest data from the National Agency for Campaign against Alcohol and Drug Abuse (Nacada) indicates that up to four million Kenyans consume illegal alcoholic beverages.
However, those figures are two years old, having been compiled in 2012. All indications are that more Kenyans on the lower strata of the income scale are consuming the beverages. The most reliable figures from the easier-to-monitor regulated drinks market show that Kenya is Africa’s third biggest consumer of beer.
But in 2013, something changed the whole dynamics of the alcoholic drinks market. The Government opted to slap Excise Duty on Senator Keg, the downstream brand produced by East African Breweries Limited (EABL), which was meant to woo drinkers of such deadly concoctions to a more hygienically prepared brew.
It also created more employment in the rural areas where the beer was sold through kegs making it more affordable. In addition, it opened a new market for sorghum farmers.
Partakers of the cut-price Senator Keg included sections of the middle class battling inflationary pressures in their wallets, who migrated downstream, away from the premium brands.
“OBAMA”
The duty waiver on Senator, therefore, did more than just create a choice for drinkers. Using a below-the-line economy, the beer was marketed differently from EABL’s international brands and penetrated virtually every bar in the rural areas, earning it the tag “Obama”.
By all accounts, Senator and its rotating kegs and manual pumps were hugely successful (some analysts estimated that it accounted for 10 per cent of EABL’s beer sales at some point), but not so much after that imposition of tax by the Government. The immediate effect was that the price of keg beer more than doubled in just a day. Sources within Nacada Wednesday told The Standard that there was a surge towards illicit alcohol laced with methanol, various kinds of fertiliser and sometimes, even battery acid and sisal juice.
Today, the market for illicit brews remains outside the tax bracket, while the Government’s hopes of more tax revenue from the Senator brand have suffered a huge blow, as consumption of the product declines.
More than any organisation, Nacada found itself in a moral dilemma over how to deal with the Senator Keg phenomenon.
On the one hand, EABL appeared to be creating a new market for beer, something the agency would want to discourage. On the other, it had a beneficial health impact by reducing the number of those endangering their lives by knocking down illicit drinks by the glass or tin.
The choice of a lesser of two evils was thus ultimately decided for Nacada by KRA’s decision to tax Senator. The rest is history.
