All Kenyan beers in the region retail at Sh200, making Tanzania beer popular.
Scores of traders in Kuria region, Migori County, were arrested for selling Tanzanian beer.
The crackdown, which begun on Friday evening, saw the police officers storm bars and beer depots to search for the Tanzanian beer. Those who had stocked the beer were hounded into police trucks and taken to police cells. The most affected areas were Ntimaru, Kegonga, Senta, Ntimaru and Nyamtiro.
"The police officers ambushed us late in the evening just when many customers were enjoying their drinks.
They took away several crates of beer and arrested many the bar attendants," said Mr Benson Chacha, a bar owner in Ntimaru.
Tanzanian beer, locally called Magufuli, is one of Tanzanian goods which have flooded the Kenyan side of the border as it is cheap compared to the Kenyan beer. Bar owners say they are forced to sell the beer because their customers do not like Kenyan beer.
"Why should I stock Kenyan beer yet very few people buy and the stock rarely moves?" said Ms Susan Boke, a pub owner in Kehancha.
Some brands of Tanzanian beer go for as cheap as Sh80 with the most expensive one going at Sh120. All Kenyan beers in the region retail at Sh200 making Tanzania beer popular.
The traders have taken advantage of the porous Kenya-Tanzania border to smuggle the beer into the country. Security officials in the county have vowed to end the illegal business.
Migori County Commissioner Joseph Rotich recently said the police will launch a crackdown on contraband goods in the region.
The Friday crackdown came a few hours after Deputy President William Ruto left the region after he officially opened Kuria East police divisional headquarters at Kegonga.
The DP had reiterated the government's commitment to fighting insecurity in the region.