Kenyan consumers may be headed for an acute shortage of rice, toothpaste and a range of beauty products in the wake of a three-week blockade on imported stocks in the ongoing fight against fake quality mark stickers.
The Kenya Bureau of Standards (Kebs) stopped issuing the new import standardisation mark (ISM) stickers following a recent discovery that millions of fakes were in circulation.
Imported finished goods cannot trade in Kenya without the stickers.
The blockade has forced dealers to hold on to any fresh stock of consumer products, including toothpaste, detergents and sanitary towels, in their warehouses because trading in such goods without the stickers amounts to a criminal offence.
“Consumer products like rice, which are fast-moving, will be affected most if this is not sorted out immediately,” Naivas Supermarkets chief operating officer Willy Kimani said.
“We simply cannot restock imported goods without the ISM stickers because it’s a criminal offence. We’d rather have empty shelves than risk.”
Kenya imports huge amounts of rice, mostly from Pakistan, to plug shortfalls in domestic production.
Retailers said the stickers blockade has lasted for more than three weeks, translating to cost overruns as goods stay longer in the go-downs and the shelves get emptied, setting the stage for higher consumer prices.
Mr Kimani said Naivas had a stock cover he hopes will sustain operations for a couple of days, pending a return to normalcy.
French retail giant Carrefour yesterday said it had started feeling the pinch of constrained supply.
“Carrefour has sufficient stock on some products that were imported before the directive was issued. However, we are already feeling the pressure on products that we receive on a weekly basis (weekly fresh imports),” said Franck Moreau, the country manager.
“Carrefour does not display products for sale to customers without the ISM stickers. As a result we may have a shortage on airfreighted products or dead stock for airfreighted goods.”
If not resolved soon, empty shelves will hit traders and shoppers alike putting a drag on an economy that has barely recovered from last year’s bruising elections.
Consumers are already battling steep taxes that the Treasury introduced this month and a shortage-induced price hike could further weaken purchasing power, especially in the lower segments of the social pyramid.
Affected dealers include importers of beauty products from Dubai, European wines and spirits and Chinese products.
But products already certified by Kebs under the Diamond Mark of Quality Scheme are exempted from mandatory application of ISM, including Procter & Gamble’s Aerial detergent and Always brand of sanitary towels which are made in Egypt.
It has helped that some local consumer goods makers mostly ship in intermediary goods such as industrial sugar and chemicals for processing. Such goods do not require the stickers but only undergo quality verification and conformity tests.
Kebs acting managing director Moses Ikiara said the agency had stopped printing the new ISM stickers pending ongoing investigations into the sale of contraband goods and fake stamps.
“We stopped printing the stickers. In the meantime we’re coming up with a stop-gap measure, maybe use of certificate of conformity, before we find a permanent solution,” said Dr Ikiara, who took over the leadersip of Kebs after Charles Ongwae was charged with multiple criminal offences.
Kebs is this morning expected to meet traders’ representatives, along with manufacturers to find a solution to the stickers problem. It is suspected that the ISM stickers, which were introduced in September 2015, had been tampered with, weakening the fight against the sale of contraband and fakes.
The freeze order is expected to give way to a new tamper-proof quality mark.
“Our working capital is stuck even as our members’ warehousing costs are ever growing,” said Flora Mutahi, the chairperson of Kenya Association of Manufacturers (KAM) – the lobby group for industrialists.
The stalemate has hit local manufacturers who, for instance, import large sheets of steel wool then break it up and package locally, according to KAM.
Ms Mutahi said that in the wake of the fight against contraband sugar, verification for industrial sugar has all but ground to a halt, starving local processors of the intermediary material.
The delay has in recent days seen a shortage of the sweetener on supermarket shelves.
“We are facing demurrage charges and higher shipping costs as containers are not being returned on time,” Mrs Mutahi said. The manufacturers have now petitioned the Kenya Ports Authority for a waiver on demurrage charges, arguing it is not a problem of their own making.