The county is one of the main transit routes used by smugglers.
Police in Kwale have impounded 300 bags of suspected contraband sugar at Bodo-Shirazi Beach in Msambweni.
The officers accompanied by Kenya Revenue Authority (KRA) and Kenya Bureau of Standards (Kebs) officials intercepted the sugar while it was being offloaded.
The consignment packed in 50-kg bags is suspected to have been illegal imported from Tanzania.
Matuga police boss Joel Chesire said they intercepted the contraband sugar following a tipoff from the public.
“We were alerted by members of the public about the arrival of suspicious consignment of imported sugar at Bodo and we mobilised our officers and impounded the cargo before it could find its way way into local market," he said on Wednesday.
Mr Chesire said they arrested main suspect, a prominent businesswoman in Msambweni together with two drivers and two loaders while others escaped.
The suspects will be arraigned in court facing charges of importing contraband sugar with an estimate value of Sh1.8 million.
This comes a week after 104 bags of brown sugar were found in a thicket hidden by building stones at Mlazani forest in Burani.
Mr Chesire warned that the war against contraband goods would continue.
The county is among the main transit routes used by smugglers.