This archive report was first published on 18 December 2019.
On December 18, 2019, beer and spirits manufacturers in Kenya issued a warning to bar owners to stick to recommended alcohol prices to boost sales during the Christmas period.
The manufacturers, through their lobby group, the Alcohol Beverages Association of Kenya (ABAK), argued that higher alcohol costs could hurt sales, and instead encouraged bar owners to sell drinks at lower recommended prices.
Locally brewed beer prices had been adjusted upward by Sh10 in July due to tax increases, with the recommended retail price of Tusker Lager set at Sh160.
However, some bar owners had raised prices above the recommended price, and were expected to further increase product costs on increased demand during the festive season.
Manufacturers reckoned that selling beer prices above the recommended price would dim sales, and push some drinkers to illicit drinks.
‘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 ABAK Chairman Mr Gordon Mutugi.
ABAK also cited a study it commissioned last year, which showed that increasing the price of legitimate alcohol had been shown to push drinkers to illicit brews.
Beer on the Ugandan side of the Busia border costs half what it goes for on the Kenyan side, a situation that has proven uncompetitive for bars and restaurants on the border towns, driving down sales and taxes.
A half-litre beer bottle in Kenya, which sells at an average of Sh200, is sold at Sh80 in Uganda. Bars on the Kenyan side that smuggle Ugandan brands sell them at about Sh100 between Busia and Malaba.
