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Uproar over Unilever’s sale of tea estate

RIFT VALLEY
By Nikko Tanui | November 24th 2021

The company holds an estimated 36,000 acres on a 99-year leasehold in Kericho. [Courtesy]

A storm is brewing over Unilever's company's decision to sell its global tea business which includes its tea estate in the county.

The company holds an estimated 36,000 acres on a 99-year leasehold in Kericho.

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 (CEO) Alan Jope said the decision to sell Ekaterra was part of the growth strategy for the company

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 around €2 billion (Sh252 billion) in 2020.

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

Unilever Chief Executive Officer (CEO) Alan Jope. [Courtesy]

"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,” he said.

However, Kericho Governor Paul Chepkwony, Senator Aaron Cheruiyot and Kipkelion East MP Joseph Limo in whose constituency the tea plantation is located, in their respective separate statements, opposed the sale agreement.

In a letter dated November 9, 2021, tabled in the Senate, Mr 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 government.

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

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

Kericho Governor Paul Chepkwony. [David Njaaga, Standard]

Limo said the Constitution enacted in 2010 made mechanisms to remedy massive historical injustices by, among others, reducing the leasehold held by the company 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 Kipkelion East MP added that "prohibition on such dealings are also contained in the English common law that applies to Kenya."

The National Land Commission (NLC) member James Tuitoek faulted Parliament over the amendment to the Land Registration Act, 2012, section 38 and 39,

"There is a section of the law which deleted transfers of land on leasehold. The consent was to be given by the lessor which could either be the county or the national government.

Tuitoek nonetheless said NLC was going to work with county governments to restore the deleted provisions of the law. 

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