This archive report was first published on 26 July 2019.
On July 26, 2019, the Alcohol Beverages Association of Kenya (Abak) initiated talks with bar owners to maintain recommended prices for beer and spirits.
The move aims to cushion businesses from the effects of higher taxes and boost sales.
Locally brewed beer prices were adjusted upward by Sh10 this month due to tax increases, with the recommended retail price of Tusker Lager set at Sh160.
However, some bars have been raising prices above the recommended rates, raising fears that higher prices could dim sales.
Abak chairman Gordon Mutugi warned that if retailers fail to offer value to consumers, they risk losing sales and goodwill across other categories.
“If retailers really want to grow their business they have to offer value to consumers, otherwise buyers will take their money elsewhere, meaning that in addition to lost sales, goodwill across other categories will also be lost,” said Mutugi.
Abak also cited a study it commissioned last year, which showed that increasing the price of legitimate alcohol pushed drinkers to illicit brews.
“Consumers respond to the changes in prices by changing the taste of the commodity. This leaves a large population in the lower end of earners to resort to illicit, banned alcoholic beverages,” Abak said.
