Alcohol industry seeks halt to Bill, warns of Sh3.3bn revenue loss

Alcohol manufacturers have warned that Kenya could lose billions of shillings in business revenue and tax collections if Parliament approves proposed changes to the country's alcohol laws, with the industry arguing that tougher restrictions could hurt licensed traders and strengthen the illegal drinks market.

The Alcoholic Beverages Association of Kenya (ABAK) is pushing for the withdrawal of the Alcoholic Drinks and Drugs Control Laws (Amendment) Bill, 2026, saying its proposed measures could disrupt legitimate businesses, threaten thousands of livelihoods and make illicit alcohol more attractive to consumers.

The association estimates that increasing the minimum legal drinking age from 18 to 21 could cost the retail and hospitality industries Sh3.3 billion in yearly earnings. The government could also lose an estimated Sh1.8 billion in tax revenue, while 8,960 jobs and 1,792 licensed outlets face possible disruption.

The Bill was presented in the National Assembly for First Reading on Thursday, marking the beginning of its consideration by lawmakers. If passed, the proposed changes would introduce new restrictions covering the manufacture, advertising, distribution and sale of alcoholic beverages.

Apart from raising the legal drinking age, the legislation seeks to limit alcohol sales in supermarkets and other outlets, outlaw online purchases and deliveries, and introduce a Sh2 charge for every litre of alcoholic drinks manufactured locally or imported into the country.

ABAK chairperson Kui Kinyanjui said the proposed restrictions could leave established manufacturers and distributors struggling to compete, particularly as the country continues to grapple with the widespread sale of illegal alcoholic products.

"Coming at a time when our industry is under significant pressure from illicit alcohol providers, this Bill risks weakening legitimate businesses while creating more room for illicit alcohol to flourish," she said yesterday.

"This will affect thousands of jobs, affect planned investments, reduce government revenue and ultimately expose consumers to greater harm," she added.

The lobby has also questioned the planned restrictions on supermarkets, restaurants and digital platforms, arguing that these outlets provide important channels through which consumers access legally manufactured alcoholic beverages.

ABAK fears that limiting these distribution points could interfere with the operations of licensed businesses and reduce the availability of regulated products. It warns that consumers who find it difficult or expensive to purchase alcohol through recognised outlets could turn to cheaper alternatives in the illegal market.

The proposed levy is another major concern for manufacturers, who estimate that the Sh2 charge on every litre of locally made or imported alcoholic drinks would translate into an additional annual financial burden of about Sh1.3 billion.

The association argues that the extra cost could widen the price gap between legally manufactured beverages and illicit products, giving illegal sellers an advantage over businesses that comply with existing regulations and tax requirements.

With the Bill now before Parliament, Kinyanjui wants lawmakers to reconsider its provisions and allow broader discussions before making decisions that could affect the entire alcohol industry.

"The tabling of this Bill in the National Assembly makes it urgent for Parliament and the government to pause and consider its far-reaching consequences. We strongly urge Parliament not to advance the Bill in its current form," said Kinyanjui.

"We encourage transparent consultations involving county governments, regulators, public-health stakeholders and the entire alcohol value chain. Our shared priority remains to protect consumers, preserve livelihoods and decisively tackle illicit alcohol."

The disagreement comes as illicit alcoholic beverages continue to take up a large share of Kenya's alcohol market, posing a challenge to legitimate manufacturers and reducing the government's ability to collect taxes from the sector.

A 2025 Euromonitor study commissioned by ABAK placed the share of illicit alcohol at 60 per cent of the country's total alcohol market by volume in 2024.

The research further established that the quantity of illicit alcoholic drinks in circulation grew by 27 per cent between 2022 and 2024, highlighting the scale of the challenge facing regulators and licensed industry players.

The study estimated that illegal alcohol trade cost the government about Sh120 billion in potential revenue in 2024.

ABAK says the figures should inform Parliament's consideration of the proposed law, warning that additional restrictions and costs on legitimate operators could deepen the problem rather than address the growth of unregulated alcohol businesses.