•Manufacturers say the law will result in massive job losses across the alcohol value chain, from glass and carton manufacturers, bars and transporters to distributors.
•Government would also suffer lower revenues because of the decline in alcohol volumes while people resort to illicit brews. Sample of alcohol bottles in a liquor shop Alcohol manufacturers will need to invest at least Sh7 billion and lose Sh3.4 billion to implement the proposed changes in packaging of alcoholic drinks, the Kenya Association of Manufacturers(KAM) has said.
The law proposes to increase the minimum packaging of alcoholic drinks to 750 millilitres. The proposed law would leave quality alcohol out of reach of a significant portion of the consumer. Due to inaccessibility of affordable alcoholic beverages, most consumers will resort to illicit brews with dire impact to their lives, increased societal issues and the health, If if passed, the law proposed by Wundanyi MP Dan Mwakuwona would result in massive job losses across the alcohol value chain, from glass and carton manufacturers, bars and transporters to distributors, the association notes.
In a submission to the National Assembly, KAM chief executive Phyllis Wakiaga says apart from the economic impact, the law’s effects would extend to the health of drinkers who would have to resort to illicit alcohol.
“The proposed law would leave quality alcohol out of reach of a significant portion of the consumer. Due to inaccessibility of affordable alcoholic beverages, most consumers will resort to illicit brews with dire impact to their lives, increased societal issues and the health,”Wakiaga notes.
The Sh3.4 billion loss would be the cost of writing off the returnable bottles, crates, plant and machinery at current book value.
To replace them, the manufacturers would have to make an investment of at least Sh7 billion.
KAM argues that since glass is sourced locally, alcohol makers would have to reduce their orders, forcing some glass makers to close.
Consol, a glass manufacturer, said it could cost up to Sh169 billion to replace the close to 50 million crates of beer and the equivalent 1.25 billion single bottles already in circulation in the country.
“With the current severe economic challenges, it would be unwise for Parliament to burden the alcohol industry with a bill of Sh169 billion. Further, the local glass industry may not even be in a position to produce all this glass within a short period to ensure industry compliance,” said Joe Mureithi, Consol’s Regional Executive for East Africa.
He further […]