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Counterfeit products cost Kenya Sh30 billion in revenue

By Stephen Mutoro | April 25th 2017

NAIROBI, KENYA: The sudden increase in counterfeit and unlicensed products like alcoholic and illicit brews in circulation in Kenya is robbing the country over Shs30 billion in annual revenue. This is because illicit dealers do not pay tax yet they shrink revenues of those who genuinely pay taxes.

An estimated four million Kenyans are currently consuming these counterfeit products, posing serious threat to their health, security and the economy of the country.  Such illegal businesses affect young people who could otherwise engage in meaningful productive economic activities.

Further, 14,000 young people die each year from complications related to consuming illegally-brewed alcohol while more victims are currently suffering permanent defects resulting from second generation alcoholic drinks.  In quest to make quick money, manufacturers of illicit brews are spiking their backyard concoctions with deadly industrial chemicals such as methanol, food grade ethanol, and sisal juice or jet fuel, to make them more potent and more desirable to consumers.

Genuine alcoholic manufacturers do not just suffer the loss associated with production of second generation alcoholic products, but they lose revenues as dubious dealers still hold onto 30 per cent market share of the alcoholic multi-billion industry. The loss and destruction of illegitimate alcohol business has seen genuine investors losing estimated tens of millions daily.

Surging numbers of illegal alcohol manufacturers are exposing millions of Kenyan consumers to health risks such as substance poisoning. It is the poor in society who provide an immediate market for the uninspected alcoholic beverages which often contain lethal compounds.

Consumer Federation of Kenya (COFEK) has received reports from various distributors and distillers across the countries, which have raised concerns about some of their brands being illegally repackaged and sold to unsuspecting consumers by unscrupulous traders.

Even more, these traders have been counterfeiting Kenya Bureau of Standards (KEBS) quality marks by using already used bottles of established manufacturers to package their illicit products. Thus, there is an urgent need by KEBS to make it difficult for these unscrupulous people to counterfeit its quality marks.  The organization will need to do more by enhancing its’ market surveillance role.

The rise in production and consumption of illicit alcohol has been fueled by individuals who seem to be colluding with corrupt law-enforcing officers to facilitate the peddling of substances that do not meet the standards required by law.

The most affected Counties by this unlawful practice include Central Kenya region, Kiambu County,  Nakuru County,  Narok County, Machakos County , Western and Nyanza regions.

The law imposes strict penalties against persons found manufacturing or distributing illicit alcohol including a Sh2 million fine or a jail term of up to 5 years. The law also set penalties against those found selling alcohol to under-age consumers and to police officers in uniform.

As long as a steady market exists for their products, and sections of authorities are all too willing to turn a blind eye, Kenya’s illegal alcohol manufacturers will be here to stay. Sporadic raids are not long-term solution to the problem of illegal production and consumption of alcoholic drinks.

The national and county governments need to stand firm on withdrawing and or revoking licenses of all traders, who are engaged in the business of producing, distributing or retailing illicit brews. A standard legislation needs to be taken up by the Council of Governors.

There is a need for NACADA to urgently bring together stakeholders to address this growing challenge considering that more consumption of illicit and counterfeit drinks is anticipated as the general elections seasons sets in. After all, elections are often associated with alcohol-based hooliganism among the young people.

Through NACADA, government needs to embark on a continuous consumer sensitization campaign to educate the consumers on the dangers of consuming unapproved/unlicensed products.

The Directorate of Criminal Investigations and the Office of the Inspector General of Police need to provide a clear strategy on how to put this matter to rest, especially now as the country heads into an electioneering period. OCPDs and OCSs need to be directed to be regularly avail information on arrests, seizures and volumes of such illicit drinks.

That County Governments and County Security coordinators should also work closely with licensed distributors and distillers to ensure only licensed products are sold in their respective counties. 

The writer is the Secretary General of the Consumer Federation of Kenya

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