Members of Kenya’s alcohol industry have strongly opposed the steep fees proposed in the Sustainable Waste Management Regulations 2024, arguing that the costs will significantly burden the sector.
The Alcoholic Beverages Association of Kenya (Abak) has urged the National Assembly’s Committee on Delegated Legislation to review what they consider punitive fees. The association estimates that the proposed fees could result in a 70% increase in production costs for alcohol products, translating to an additional $250 million (Sh32 billion) for the industry.
Industry Concerns Over Increased Costs
Abak, an umbrella body representing Kenya’s leading alcohol manufacturers and distributors, warned that these increased production costs would inevitably be passed on to consumers.
The proposed regulations, published by the Cabinet Secretary for Environment, Climate Change, and Forestry, target a wide range of packaging materials, including plastics, aluminum, paper, glass, and cartons, with a fee of Sh150 per item. Packaging for hazardous products, such as industrial chemicals, pharmaceuticals, and agrochemicals, will also attract the same fee.
The regulations extend to non-packaging items like rubber, artificial hair, diapers, and sanitary towels, as well as imports of end-of-life motor vehicles and machinery.
Alcohol Industry’s Objections
Zack Munyi, Head of Public Policy at Kenya Breweries Limited (KBL), highlighted the burdensome nature of the proposed fees during a submission to the committee chaired by Ainabkoi MP Samuel Chepkonga.
“The legislation will affect manufacturers, importers, brand owners, repackagers, refilters, rebranders, and converters,” Munyi said. He argued that some contentious provisions, such as fees on packaging materials like glass and aluminum, were introduced without adequate public consultation.
Munyi also expressed concern about the cumulative financial impact, noting that industry players would face multiple fees, including Sh150 per item, registration fees, and additional levies for Extended Producer Responsibility (EPR) certificates.
“The cost of production is going to increase by 70% if this regulation is passed in its current form. This excludes the impact of other levies such as a Sh5,000 registration fee for Producer Responsibility Organisations (PROs), a 5% payment to Nema based on amounts paid to PROs, and an annual operating license fee of Sh100,000 per PRO,” he added.
Economic Challenges for the Sector
Abak Chairman Eric Githua emphasized the disproportionate impact of the proposed fees on the manufacturing sector, which is already grappling with increased operational costs, reduced disposable income among consumers, and declining sales.
“Given the magnitude of the impact, a regulatory impact assessment should have been conducted by the Ministry of Environment and Forestry to justify the proposed fees. Unfortunately, this has not been done,” Githua stated in a written submission.
While Abak supports the goals of promoting sustainable waste management practices, the association argued that some provisions of the regulations impose an unsustainable financial burden on the industry.
Call for Revision
MP Samuel Chepkonga assured stakeholders that the committee would engage the National Environment Management Authority (Nema) and the Ministry of Environment to address the industry’s concerns. He pledged to advocate for a downward revision of the fees to reduce the cost of doing business in the country.
The alcohol industry remains hopeful that its proposals will be considered to strike a balance between environmental sustainability and economic viability.
