HIGH RATES

Stop overpricing alcohol, bar owners told

Implementation of the inflation tax adjustment saw some manufacturers increase product prices marginally.

In Summary

• A study commissioned by ABAK last year showed that increasing the price of legitimate alcohol has been shown to push drinkers in the direction of the illicit

BOOZE: An estate pub in Zimmerman, Nairobi.Photo/File
BOOZE: An estate pub in Zimmerman, Nairobi.Photo/File

Distributors of alcoholic beverages under the aegis of the Alcohol Beverages Association of Kenya (ABAK) has urged retailers to stick to the Recommended Retail Prices (RRP).

This follows a move by the Kenya Revenue Authority (KRA) to effect a 5.17 per cent annual inflation tax adjustment on excise duty charged on the products.

Implementation of the inflation tax adjustment, which was first instituted last year, saw some manufacturers increase product prices marginally to accommodate the new realities.

 

The association is however concerned that some traders have taken advantage of this to overprice customers out of their favourite drinks despite well-spelled out prices.

It added that despite publishing prices in media for all to see,  and adhere to it is not uncommon to buy a bottle of beer say at Sh140 in one part of town and find the same retailing at Sh500 in another location.

“This exaggerated pricing does not only make it difficult for revelers to enjoy their favorite tipple, but some also find it difficult to visit outlets in their own neighbourhoods and have had to commute to look for fairer prices elsewhere,” ABAK chairman Gordon Mutugi said.

He added that 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.

Retailers who are still charging at the RRP offering a compelling price on alcoholic beverages will keep customers coming through the door as it is the primary driver of footfall into stores,”  Mutugi said.

A study commissioned by ABAK last year showed that increasing the price of legitimate alcohol push drinkers to illicit.