EABL reduces the prices of spirits

• Revision comes after scrapping of the raised excise duty

The East African Breweries Ltd (EABL) has revised its prices for spirits, six months after increasing them due to a rise in excise duty.

The reversal of the prices to what they were trading at six months ago follows the scrapping of the increment in the excise duty by Treasury.

This came as a result of intense lobbying by the alcohol and beverage industry players under the aegis of the National Alcohol Beverages Association of Kenya (Nabak).

“The reduction has been occasioned by Treasury’s lowering of the excise duty, therefore, we had to extend the same to our consumers,” EABL’s corporate affairs manager, Mr Ken Kariuki, told the Nation after the brewer published the new prices of the spirits in the local dailies on Wednesday.

While it could not be established at exactly what point the reduction was effected, Mr Kariuki added that EABL had received the Gazette notice last week. The notice is said to have reduced duty from 65 per cent to 35 per cent, to the relief of the brewers.

“We have been lobbying the government and got the notice last week. We have also moved to ensure that Kenyans can also benefit from the same,” he said.

In his budget speech for the 2009/2010 fiscal year, Finance minister Uhuru Kenyatta, said he expected the new measures would lead to a reduction in prices.

The proposal then was a switch from alcohol by volume to an ad valorem rate of 65 and 50 per cent of the ex-factory selling price for spirits and wines.

“I expect this measure to reduce the prices of portable spirits and wines, thereby making them affordable to our people to reduce consumption of unhygienic and dangerous illicit spirit,” Mr Kenyatta had said.

However, EABL among others, had insisted that the application of the tax measures would only translate to an increase in prices.

According Treasury, the switch was expected to align Kenya’s taxation system to those of neighbouring countries and hence avoid the smuggling of and tax evasion on spirits and wine imported from such countries.

But the industry petitioned the minister over the tax measures.

With the new reduction, the cost of a tot (30ml) of Johnny Walker Blue — the most expensive among the spirits — will now cost about Sh3,000 down from the previous Sh5,000.