EABL pays Sh64bn in tax to the region

EABL factory
EABL factory at Ruaraka in Nairobi. FILE PHOTO | NMG 

Beer maker East Africa Breweries Limited’s (EABL) #ticker:EABL tax contribution to regional exchequers rose by 18 percent to hit Sh64 billion, the company’s annual report indicates.

The rise is attributable to higher sales of EABL’s brand categories which saw revenues rise 12 percent to Sh83 billion, compared to the previous period.

EABL’s performance was underpinned by recovery in the consumption of both beer and spirits across Kenya, Uganda and Tanzania.

According to the firm’s audited financial statements, all regional markets registered increased sales, pushing up the firm’s total revenues by 12 percent to Sh82.54 billion from Sh73.45 billion.

Revenues in Uganda and Tanzania grew by eight percent and 20 percent respectively while Kenya went up 13 percent.


Ugandan and Tanzanian subsidiaries contributed 15 percent and 12 percent respectively to EABL’s profits with Kenya accounting for 73 percent of the earnings.

In Kenya, EABL sells the low-end lager Senator Keg brand and spirits and these attracted double-digit growth.

EABL is counting on frothing demand for the low-priced Senator Keg beer and also Scotch whisky to counter the impact of tax increases.

The increased demand for Senator Keg has resulted in the company increasing the number of sorghum farmers to 62,000, earning Sh1.2 billion during the last financial year.

Sales of Senator Keg, a low-priced lager made from locally-grown sorghum, rose by close to a third in the last financial year, which will help to offset the impact of higher taxes.

“Our efficiency and agility, coupled with a relatively stable macroeconomic environment, have provided tailwinds for better performance, with EABL returning organic volume of 11 per cent and net sales growth of 12 per cent,” said Group managing director Andrew Cowan.

The firm, however, decried unpredictable excise tax saying the increases inflict a counterproductive effect on its revenue contribution to governments and help drive consumers to illicit alcohol.

“Sound tax policy must be fair and sensitive to the effects of losing consumers to illicit alcohol, which is neither safe for consumption nor do they contribute to the economy in form of taxes,” EABL’s local subsidiary Kenya Breweries Limited Managing Director, Jane Karuku.