Brewer sees opportunity and some risk in new beer regulations

President Kibaki’s assent to the alcoholic drinks regulations is promising a near overhaul of Kenya’s liquor market and changes the fortunes of hundreds of players in the manufacturing and marketing chain.

Key provisions of the new law include the reversing of the 30-year ban on brewing and consumption of traditional liquor and the ban of vending of alcohol within a radius of 300 metres from learning institutions—threatening the closure of thousands of bars countrywide.

It presents the biggest threat on the market share of mainstream brewers such as East Africa Breweries Limited (EABL), Kenya Wines Agencies Limited (Kwal) and Keroche Industries in its current form.

EABL’s corporate affairs director Ken Kariuki shared his thoughts with the Business Daily on the controversial law, its impact on EABL products and what the listed brewer is doing to tackle the challenges. Excerpts:

BD: What’s EABL’s take on the new alcoholic drinks regulations?

KK: The Act will allow government to have greater control of alcohol standards in the country. EABL and indeed NABAK without reservation, condemns the production and sales of illicit brews by any other name an in principle supports the government efforts in tailoring an Act that supports the production and sale of clean safe alcohol for Kenyans. We therefore endorse it.

We have however mentioned that there are certain clauses that we are unhappy about and we have already sought intervention of the law maker and the relevant ministry. We believe that Government does not seek to curtail business environment and thus are hopeful for positive outcome on the issues.

BD: Do you expect the new order to affect your company’s fortunes in any way?

KK: As a business we expect outcomes to be decided by the consumer, who is our customer. The choice of what the consumers will take is entirely their call. We therefore remain steadfast in ensuring that we continuously meet their needs.

As far as what the new order may bring, we can only hope for uniformity and predictability in business environment and compliance with the rules.

BD: EABL had earlier indicated that it was not comfortable with five provisions of the new law. What are these provisions?

KK: First, the is the provision requiring makers of liquor to place warning labels on 30 per cent of product packaging.

This provision amounts to a dilution of brand identity and poses the danger of self-discrediting some of the strongest brands in the region that are great income earners for both wananchi and the government.

We believe that there are safe levels of alcohol consumption and hence no need to move in the direction of the tobacco industry regulation.

Entry of under 18 to outlet: No person holding a license to manufacture, store or consume alcoholic drinks under this Act shall allow a person under the age of eighteen years to enter or gain access to the area in which the alcoholic drink is manufactured, stored or consumed unless accompanied by an adult.