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County leaders oppose plans by Unilever to sell Sh500b tea estate

COUNTIES
By Nikko Tanui | November 26th 2021

A tea plantation owned by Unilever tea company. The UK-based company is on the spot over plans to sell 36,000 acres of leasehold land. [Nikko Tanui, Standard]

Kericho County leaders have opposed the decision by Unilever to sell its global tea business, including its tea estate. Unilever holds an estimated 36,000 acres on a 99-year leasehold in the county.

The United Kingdom-based company announced that it had agreed to sell its global tea business, Ekaterra, to CVC Capital Partners Fund VIII for €4.5 billion (Sh567 billion) on a cash-free, debt-free basis.

Unilever Chief Executive Officer Alan Jope said the decision to sell Ekaterra was part of the growth strategy for the company.

However, Kericho Governor Paul Chepkwony, Senator Aaron Cheruiyot and Kipkelion East MP Joseph Limo, in separate statements, opposed the sale agreement.

In a letter dated November 9, tabled in the Senate, Cheruiyot demanded that Agriculture Cabinet Secretary Peter Munya states the policy to be put in place to curb the sale of land under the custody of multinational tea firms without the involvement of the national and county governments.

The sale of Unilever tea arm follows a similar “unilateral” sale by James Finlay tea company of 1,154-acre Lemotit flower farm to Black Tulip Group.

Ekaterra is the world’s leading tea business, with a portfolio of 34 brands, including Lipton, PG tips, Pukka, T2 and TAZO. The business generated revenues of about €2 billion (Sh252 billion) in 2020.

Pev Hooper, a managing partner at CVC Capital Partners, said Ekaterra is a great business, built on a strong foundation of leading brands and a purpose-driven approach to its products, people and communities.

“Ekaterra is well-positioned in an attractive market to accelerate its future growth and to lead the category’s sustainable development. We look forward to working with the team to realise Ekaterra’s full potential,” said Hopper.

Cheruiyot wants the government to resurvey land held by multinational tea companies in Kericho and Bomet counties to establish the actual acreage they occupy.

Governor Chepkwony said his administration will challenge the two land sales in Kenyan law courts, England and The Netherlands where the tea firm’s headquarters are located.

“Disposing of the land under leasehold without involving the people of the county violates the Constitution,” he said.

Limo said the 2010 Constitution made mechanisms to stop historical injustices by, among others, reducing the leasehold held by the companies from 999 years to 99 years.

“By the Constitution and land laws, express approval of the county government of Kericho is required before the company engages in any dealing on the land,” he said.

The legislator said “prohibition on such dealings are also contained in the English common law that applies to Kenya.”

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