Tobacco firms lose Sh75bn to dealers in contraband

Contraband cigarettes continue to enter Kenya through porous border points despite a promise by the government to stem the smuggling wave.

Local cigarette manufacturer Mastermind Tobacco cites Malaba, Busia, Lwakhakha, Port Victoria and Chepkube as the points at which cigarettes from Dubai and India enter the country.

The players in the illicit trade are also said to use Eldoret Airport and the Mombasa port to transport the contraband.

“Cigarettes sourced from Dubai and India find their way into the Kenyan market through the port of Mombasa,” reads the report.

Over the past year, the cigarette manufacturers have lost Sh7.5 billion in revenue due to the trade.

Vessel impounded

According to the report by Mastermind Tobacco, in August last year, a vessel was impounded at the port of Mombasa with 470 cartons of contraband Supermatch cigarettes destined for Juba, Southern Sudan.

“However, the products are still lying at the Kenya Revenue Authority premises with a real danger of them finding their way into the Kenyan market,” reads a section of the report.

The players in the racket are said to be using fake Kenya Revenue Authority stamps to pass them off as genuine.

The company accuses law enforcers of laxity in dealing with the illegal trade. It says some suspects were arrested with contraband cigarettes but were never prosecuted.

“There has been no successful prosecution even after information has been passed to the relevant authorities, which include the police department, KRA and the director of CID,” the report says.

Three faces

There are three faces of the trade in Kenya: importation of tobacco products, undeclared local production and counterfeit products.

It is estimated that contraband cigarettes take up 10-15 per cent the value of national consumption.