COVID19

KBL Kisumu Keg plant wasting away as bars remain shut

Beer manufacturer Kenya Breweries Limited raises fears of permanent closure

In Summary

•Kisumu Keg plant was commissioned by President Uhuru Kenyatta in 2017 as part of government's facilitation of manufacturing agenda.

•KBL says Kisumu plant was intended to drive new value chain job creation opportunities and market development.

EABL Supply Chain Director Patrick Kamugi gives a Keg serving to KBL Managing Director Jane Karuku. /FILE
EABL Supply Chain Director Patrick Kamugi gives a Keg serving to KBL Managing Director Jane Karuku. /FILE

Kenya Breweries Limited Sh14 billion Keg plant in Kisumu is wasting away following the closure of bars in measures to contain Covid19 spread.

The plant has remained shut since March 23, the situation worsened by the fact that Keg has no take-home option.

KBL MD Jane Karuku said the Keg value chain has collapsed 100 per cent, setting the stage for job losses affecting women and hundreds of thousands of youth who benefit from the product.

 
 

Her concerns are contained in a memorandum to Treasury boss Ukur Yatani against a proposal to reduce the government’s burden on meeting excise duty for manufactures of beers positioned to help combat illicit brews.

“The impact of the collapse has been manifested in the unprecedented increased incidents of illicit brew consumption,” she said in the note. 

Karuku added that with the reduction in remission, the effective price in the market will need to go up, regardless of whether the Senator Keg is produced in Nairobi or Kisumu.

“This means that the Sh14 billion investment in Kisumu will be operating at 20 per cent capacity rendering the investment untenable,” the KBL boss said.

She said this would be so even with the 90 per cent excise duty remission benefit accrued to Keg beer produced in the plant at the moment.

“This will lead to the closure of the plant that has barely begun to make any returns on investments, one and a half years after commencing productions.”

Karuku warned of the increased Keg beer prices will worsen the consumption of illicit drinks.

 
 

“Low income consumers who survive on daily wage and look for alternative to informal sources of alcohol are severely affected.”