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New Kenyan Booze Law: Last Orders for EABL?

Kenyan-based brewing power East African Breweries Ltd (EABL) was given about a week to relish in its reported 10 percent profit hike from the latest fiscal year before the attention turned to President Kibaki and his promise to reform Kenya’s beverage industry.
 Kenyans enjoy EABL Senator Beer
 
 
Kenyan-based brewing power East African Breweries Ltd (EABL) was given about a week to relish in its reported 10 percent profit hike from the latest fiscal year before the attention turned to President Kibaki and his promise to reform Kenya’s beverage industry. East African Breweries, which is owned by UK’s Diageo plc, saw net profits soar to Sh8.8 billion this year—up from 8.2 billion. EABL currently dominates Kenya’s prominent liquor market, which reportedly rakes in Sh42 billion, according to a press release. The Alcohol Control Bill signed into law on September 1, however, is a significant step by the Kenyan government to regulate the industry and open the markets. The new law lifts the ban on the production, sale and consumption of all traditional brews in Kenya. That means that the low-income markets, the same ones that in the past rejected pricey, mainstream drinks for unregulated and sometimes deadly ones, will have governmentally-regulated options. The law also bans billboards and other media campaigns for alcoholic beverages as well as a vending ban within a 300 meter radius of learning institutions. The result will likely change the landscape of Kenya’s economy, forcing the closure of thousands of bars and spirits and wine shops in the area. But EABL should take the news with a grain of salt. They reported a 14 percent increase in the consumption of its low-price Senator Beer last year and recently completed a fully operational Senator keg line that pumps out 480 barrels per hour, according to a press release. For EABL, Senator Beer targets the “[L]ower end of the market that has fallen prey to illicit beers,” according to the release. There is steady consumption in Kenya, where EABL reported 70 percent of its revenue is generated. Net sales in the country also rose from Sh34.4 billion to 37.9 billion.


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