Beer Prices Are Going Up Once Again

The National Treasury has slashed the cancellation of excise duty on beer made from sorghum, millet, cassava or any other agricultural produce in Kenya to 60 percent.

The trim can be seen from a previous 80 percent rate and the move will see an increase in consumer costs for beer manufactured from locally sourced raw materials.

“Regulation 2 of the Excise Duty (Remission of Excise Duty) Regulations, 2017 is amended by deleting the words “eighty per cent” appearing in paragraph (1) and substituting therefor the words “sixty per cent,”’ Treasury Cabinet secretary Ukur Yatani said in a notice.

The price of content will skyrocket since most of them are actually made out of these products such as keg, which is manufactured from sorghum.

Manufactured beer must have at least 75 percent content of sorghum, millet, cassava or any other agricultural products grown in Kenya excluding sugar and barley.

The beer in subject will also be packed in a pressurized container of at least 30 litres while the beer must not sell for more than Ksh.100 per litre.

The manufacturers through their lobby, the Alcohol Beverages Association of Kenya (ABAK), say persistent tax hikes leave legitimate players in the industry facing uncertainty in their investments and business planning.

Early this year the Treasury clarified that not every manufacturer would benefit from the duty remission but only those whose alcoholic plants amount to an investment of no less than Sh5 billion.

The remission would be for five years from the date of commencement of operations of the manufacturer.

Treasury has further proposed to change the excise duty coverage for alcoholic beverages through the 2020, Finance Bill which seeks to reduce beers which are subject to excise duty while increasing the number of spirits subject to the duty by virtue of alcohol content.