Markets & Finance

Kenyans down half-a-billion worth of Scotch whisky


A barman displays whiskies at a Nairobi pub. The city is experiencing a surge of whisky consumption including Scotch. PHOTO | FILE

Kenyans guzzled nearly half a billion shillings worth of Scotch in 2013 and are expected to surpass this figure as the festive season concludes in 2014.

The numbers are revealed in a report released by the Scotch Whisky Association (SWA) that monitors the industry in Scotland, part of the UK.

SWA’s 2013 statistical report released late last month shows Scotch exports to Kenya stood at £3.37 million (Sh479 million), a 62 per cent increase from £2.08 million (Sh296 million) sold in 2012.

The Edinburgh-based association whose members include Diageo, East African Breweries Ltd’s (EABL) parent company, sources the data from UK customs officials and internal research.

SWA director of international affairs Campbell Evans said the increase in sales was due to a growing economy, more sophisticated consumer base and enforcement of laws.

“The market is developing and consumers are learning more about Scotch whisky. In addition, better enforcement of the tax system helps to ensure legitimate traders are able to invest in brands and retail sales,” Mr Evans told the Business Daily.

Mr Evans added that there was a possibility that 2014 sales could be higher.

“It is too early to say what the final outturn will be, but based on the first nine months of 2014 we would expect to see further growth in exports of Scotch whisky to Kenya this year,” he said.

Most sales have been of blended whisky but there has been growth in the high-street single-malt whisky.

SWA’s data only looks at Scotch whisky, implying that Kenyans could have drunk more than Sh500 million when whiskeys from American and Irish distilleries are included.

READ: Why Kenyans are in love with premium whisky

The growing consumption of the liquor has also caught the eye of EABL which has been rolling out brands targeting this market.

“Kenya’s social class is projected to grow 28 per cent from 2011 to 2020, one of the highest forecasts in the world. This group is touted to seek premium products.

‘‘Nairobi, itself, is experiencing a surge of whisky consumption where Scotch is an aspirational drink,” said EABL’s reserve brand ambassador Douglas Duncanson.

Since November, EABL has launched Talisker Storm and Bullet Bourbon Frontier Whiskey to serve this market.

This is also expected to make up for lost beer sales, especially of the Senator Keg brand which has been affected by imposition of taxation.

EABL’s sales were slightly up by 3.78 per cent to stand at Sh61.29 billion in 2014 from Sh59.06 billion a year earlier and the management has said that it will rely on spirits to boost sales.

SWA also said the current ad valorem system, which taxes whisky based on value, is discouraging investment and punitive to consumers.

“A tax system that taxes all spirits at the same rate per litre of pure alcohol would not discriminate against Scotch whisky drinkers...,’’ said Mr Evans.