Local avocado farmers to feel the pinch of Kakuzi backlash
The share price of listed agriculture company Kakuzi has so far dropped from Sh385 to Sh380 as investors exit following bad publicity.
This is after Britain’s Sunday Times newspaper highlighted alleged gross human rights violation against employees at the Makuyu based firm as presented in a UK court by 79 families.
The allegations, dating from 2009 to January this year, include battering a 28-year-old man to death for allegedly stealing avocados, the rape of 10 women, and attacks on villagers walking on paths through Kakuzi land.
NSE data shows that the firm's share price which hit a year low of Sh300 in April but gained steadily to Sh390 in July on relaxed Covid-19 global containment measures is back on a downward trend.
The company's share price hit a year high of 423.50 in November last year on high demand for macadamia in the global market.
On Wednesday, investors sold off 19.6 million shares as the pressure continues to pile on the agricultural firm.
On Monday, the court case hit at the heart of Kakuzi's business with UK-based supermarket chain Tesco dropping it from its list of avocado suppliers.
Kakuzi's other clients in UK including Sainsbury’s, Lidl and Marks & Spencer are likely to take a cue to demonstrate their fidelity to human rights and rule of law.
The Murang'a based agricultural firm is the second oldest at NSE, having been listed in 1951, a year after Car and General.
The position taken by its key produce buyers is likely to be felt by avocado farmers in the country, especially in the central region.
Kenya is the third-largest producer of avocado, with smallholder farmers accounting for 70 percent who grow it for subsistence, local markets, and export purposes.
The avocado export market in Kenya is dominated by five major exporters: Kakuzi, Vegpro, Sunripe, Kenya Horticultural Exporters and East African Growers.