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Brace for higher beer, spirits prices, warns EABL boss

BUSINESS
By Wainaina Wambu | Apr 28th 2022 | 2 min read
By Wainaina Wambu | April 28th 2022
BUSINESS
East African Breweries Ltd (EABL) Chief Executive Jane Karuku [File]

The price of beer and spirits is set to go up if the National Treasury effects proposals to raise the excise tax on alcoholic products.

East African Breweries Ltd (EABL) Chief Executive Jane Karuku (pictured) termed the tax changes contained in the current Finance Bill “disastrous,” saying they would reduce consumption, fuel the growth of illicit liquor and also deny the Exchequer more revenue.  

“The Finance Bill is yet to go through a few more hoops because it has to be discussed in Parliament, but from what I heard the CS say, it’s very bad for our industry.

The tax increase of 10 per cent in an already tough excise regime is really going to hurt our business,” said Ms Karuku as she pleaded for a review.

“The level of taxation is getting to the point of the law of diminishing returns where the revenue for the government is going to be declining instead of going up because our business is going to be depressed because the price of beer must go up if the Bill is passed.”

She was speaking yesterday at the EABL Media Day at the company’s headquarters on Thika Road, Nairobi. She said is counterproductive, coming on the back of Covid-19, rising inflation and other crises such as the fuel shortage and the Ukraine-Russia war.

Alcoholic beverages industry players say over the years, the government has turned the sector into a cash cow with a continued annual increase in the excise duty popularly known as “sin tax.”

Treasury Cabinet Secretary Ukur Yatani has proposed to raise the consumption tax on beer by Sh12.15 per litre to Sh134, wine by Sh20.80 to Sh229, while spirits like whisky, gin, rum and vodka will attract Sh47.60 additional tax to Sh335.30 per litre.

Ms Karuku explained that the high taxes are the biggest factor in determining the price of beer in the country. “A bottle of Tusker should cost about Sh100-Sh160,” she said.

 

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