Brewery has had several run-ins with the State and competitors

Officers from DCI and KRA camp outside the gates of Naivasha based Keroche Breweries. [File, Standard]
Naivasha-based brewery, Keroche, that has been slapped with a Sh14 billion tax evasion case, has had several run-ins with the State and competitors since 2003.

Started as a small plant producing fortified wines 22 years ago, Keroche ventured into spirits and eventually grew to become the second brewery in the country after East African Breweries Limited.

The brewery, owned by  Joseph Karanja, who is the chairman, and his wife Tabitha Karanja, the CEO, has had to navigate countless storms since its establishment.

When Keroche is not facing competitors who want to eat into the diverse market segment it controls, it has legal problems with State agencies such as the Kenya Revenue Authority for tax compliance or the Kenya Bureau of Standards (Kebs).

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Its woes started in 2003 when Kebs refused to issue stickers to authenticate its alcoholic brands.

This saw the company’s products confiscated and destroyed in its main market in central Kenya. Competition from other peers that produce cheaper products was also a challenge to the brewer.

“Unfair competition from companies that produce similar counterfeit products that are extremely cheaper is something we battled for years,” Mrs Karanja told The Standard in a previous interview.

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The firm had by and large penetrated the local market until 2007 when a tax raise forced her out of the wine business.

Not one to be intimidated by the new directives, she decided to take the bull by the horn, by announcing that Keroche Breweries was going into beer market.

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On October 24, 2008, Keroche Breweries launched Summit Lager in a ceremony graced by former Prime Minister Raila Odinga.

But even this move ran into headwinds after voters mainly from central Kenya turned against her for supporting ‘the opposition’, a move that adversely affected her business.

Keroche went to court in 2016 over a decision by KRA to cancel its manufacturer’s licence over a dispute on Sh1.3 billion tax bill relating to its ready-to-drink vodka.

The couple will be arraigned today after Director of Public Prosecutions (DPP) Noordin Haji ordered their arrest for allegedly failing to remit Sh14 billion tax from 2015.

An hour after the order, Mrs Karanja termed the current issue as new war by her competitors.

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Speaking on phone, Mrs Karanja said that she is a law-abiding citizen, and is ready to present herself to the investigators.

“I am shocked by the new allegations levelled against me, my husband and Keroche Breweries and this is pure malice,” she said.

She questioned the timing of the arrest orders — just two weeks after she launched the KB Lager, noting that the move was meant to intimidate her.

“This is a vendetta war launched by my competitors and I am ready to face the taxman and the DPP to prove my innocence,” she the entrepreneur.

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KerocheSh14 billion tax evasionTabitha Karanja