× Digital News Videos Health & Science Opinion Education Columnists Lifestyle Cartoons Moi Cabinets Kibaki Cabinets Arts & Culture Podcasts E-Paper Tributes Lifestyle & Entertainment Nairobian Entertainment Eve Woman TV Stations KTN Home KTN News BTV KTN Farmers TV Radio Stations Radio Maisha Spice FM Vybez Radio Enterprise VAS E-Learning Digger Classified Jobs Games Crosswords Sudoku The Standard Group Corporate Contact Us Rate Card Vacancies DCX O.M Portal Corporate Email RMS
×
Watch The Tokyo Olympics 2020 live online

Heady times as gin revolution sweeps Kenya

FINANCIAL STANDARD
By Dominic Omondi | June 22nd 2021
Analysts attribute the prodigious consumption of spirits to a growing middle class with a taste for finer things, including whiskey and rum, improved earnings, as well as a lifestyle change. [Courtesy]

In October last year, the Kenya Revenue Authority (KRA) sent out a terse notice that it was going to auction 10 containers of Tuborg beer that had been dumped in its warehouse in 30 days.

The owners of the cargo were King Beverage Ltd, the franchise that also distributes Carlsberg beer throughout the East African region.

King Beverage was wholly owned by the late tycoon Chris Kirubi’s Centum Investments before selling it at a loss to Danish Brewing Company East Africa towards the end of 2019.

“Pursuant to the provisions of section 42 of the East African Community Customs Management Act, 2004, notice is given that unless the under-mentioned goods are entered and removed from the customs warehouse within 30 days from the date of this notice, they will be sold by public auction on November 18, 2020,” said Rosemary Mureithi, the chief manager in charge of Inland Container Depots (ICD) in a gazette notice.

Most of the uncollected goods at the facility, an official at KRA told Financial Standard, belong to traders who are unable to find a market.

Graphics: The Standard

There was a small chance that the delay in the collection of the containers that arrived at KRA’s bonded warehouse on February 2, had been occasioned by the effects of the Covid-19 pandemic.  

Yet, even before the pandemic struck, the flow of premium beer - normally packaged in slim green bottles - from countries such as the Netherlands (famous for Heineken) and Denmark (the home of Carlsberg) had alarmingly been reducing to a trickle.

Not that Kenyans had suddenly become teetotalers. If anything, they were drinking even more “hard stuff.”

Even as the shipment of beer into the country declined, there was a substantial increase in imports of hard liquor, pointing to a change in taste and preferences among Kenyan imbibers as the green revolution gives way to the gin revolution. Unlike beer, which is mostly made in Kenya, a good chunk of the spirits are imported.

The leading source of hard liquor is the United Kingdom, the home of Scotch whiskey, where Kenya got more than a third of its spirits in 2019. 

It is followed by the United Arab Emirates (UAE) at 12.9 per cent and Tanzania (12.2 per cent). Tanzania is the source of a Konyagi, a popular low-end rum whose consumption in Kenya has grown in leaps and bounds since 2011.

The litres of spirits imported into the country since 2010 have increased more than ten-fold from 1.93 million litres to 11.2 million litres in 2019, data from the Kenya National Bureau of Statistics (KNBS) shows.

Official data also shows that the value of imported hard liquor - whiskey, gin, vodka, brandy, tequila and rum - increased more than four-fold in the last decade to hit Sh5.3 billion in 2019. However, the value of imported beer seems to have peaked at $12.4 million (Sh1.09 billion) in 2014 before it nose-dived to a decade-low of $7.92 million (Sh818.9 million).

It then staggered up to stand at $8.9 million (Sh907.8 million) two years ago. The increase in sales of spirits has also been a boon to the taxman. The State’s revenues from excise duty levied on wines and spirits drinks increased by a blistering 529 per cent in the period under review, according to official data. In 2011, the taxman only collected Sh2.16 billion from wines and spirits, but this shot up to Sh13.6 billion by the end of 2019.

On the other end, excise duty on beer has increased by only 89 per cent during the period under the review, with the tax authority collecting Sh27.8 billion from the alcoholic drink by the end of 2019.

Consumption of spirits also seems to have benefited from the downturn in beer sales due to the closure of bars and significant increases in prices per unit of beer last year, according to a report by Euromonitor International.

With pubs either closed or operating fewer hours, there has been an uptick in wines and spirits shops selling spirits drinking alcohol more at home as a result of Covid-19.

Products such as Gilbey’s Gin sold by the East African Breweries Ltd (EABL) has been a major beneficiary of these restrictions, translating to the emergence of what some have described as the Gin Revolution.

Interestingly, in the first nine months of the 2020-21 financial year, KRA collected Sh162 billion from the industry, surpassing its target of Sh153 billion.

Analysts attribute the prodigious consumption of spirits to a growing middle class with a taste for finer things, including whiskey and rum, improved earnings, as well as a lifestyle change.

[email protected]   

Covid 19 Time Series

 

Share this story
Uhuru roots for Africa's capacity to produce Covid-19 vaccine
President Uhuru Kenyatta has stressed the need to build Africa's capacity to manufacture vaccines to arrest emerging pandemics.
Government closes major highways ahead of WRC safari rally
the government directed the closure to run from Thursday, June 24 midnight to Sunday, June 27 at 7pm when the championship comes to an end

.
RECOMMENDED NEWS

Feedback