Tobacco amendment proposals could fuel illicit trade, KNCCI warns

The Kenya National Chamber of Commerce and Industry has raised strong concerns over key proposals in the Tobacco Control (Amendment) Bill 2024, warning that the changes could strain businesses, disrupt legal trade, and push more traders into informal markets.

The chamber now joins other business groups that have already opposed the bill, including the Retail Trade Association of Kenya, the Kenya Association of Manufacturers, and the Bar, Hotels and Liquor Traders Association.

In its submissions to the Senate, KNCCI said that while it supports efforts aimed at protecting minors from tobacco and nicotine products, some of the proposed measures risk being too strict and could negatively affect businesses, especially micro, small and medium enterprises.

The chamber warned that the proposals could create uncertainty in the sector, raise compliance costs, and encourage the growth of the illicit tobacco trade if passed in their current form.

One of the main concerns raised is the plan to introduce additional licensing and registration requirements for tobacco retailers. KNCCI argues that this would duplicate existing county licensing systems as well as national tax rules already in place.

It further warned that the extra permits would increase the cost of doing business, slow down approval processes, and expose traders to inconsistent enforcement across different regions.

“Overly restrictive or duplicative compliance frameworks can have the unintended effect of pushing activity out of the formal sector and into informal or illicit channels,” the chamber said in its memorandum to Parliament.

KNCCI, which represents businesses across the country in sectors such as manufacturing, retail, wholesale, hospitality, logistics and importation, said its members would be directly affected by the proposed changes.

“Our members are directly affected by regulatory measures that alter licensing, trade requirements, packaging rules and retail access conditions for regulated products,” KNCCI chief executive KK Mutai said.

The chamber recommended that retail tobacco trade should continue operating under existing county licensing systems such as the Unified Business Permit, while national licensing requirements should only apply to manufacturers and importers who are already regulated under the Excise Duty Act.

KNCCI also opposed a proposal in the bill that seeks to ban single-use plastics in tobacco and nicotine product packaging.

It argued that Kenya already has enough environmental laws under the Environmental Management and Coordination Act and the Extended Producer Responsibility regulations to handle packaging waste and pollution.

According to the chamber, introducing plastic restrictions through tobacco legislation would create overlapping rules, increase uncertainty for manufacturers and distributors, and shift focus away from practical waste management solutions.

Instead, KNCCI urged Parliament to focus on strengthening enforcement of existing environmental laws and improving coordination between health and environmental agencies.

It further recommended the use of existing take-back, recycling and recovery systems under the Extended Producer Responsibility framework rather than introducing blanket bans.

Another contentious proposal is the plan to restrict the sale of tobacco and nicotine products within a 100-metre radius of schools and other institutions serving persons under 18 years.

The chamber warned that this rule could heavily affect businesses operating in densely populated urban areas where schools, shops, and residential buildings are located close to each other.

KNCCI said the restriction could effectively prevent lawful retailers from operating in many towns and cities, potentially forcing the closure of thousands of licensed businesses that currently comply with the law.

It added that shutting down legal businesses would not reduce demand but could instead encourage the growth of illicit trade and informal selling networks.

As an alternative, the chamber recommended stronger enforcement of age verification rules, clear warning signage at retail outlets, regular inspections, and tougher penalties for those who sell tobacco products to minors.

KNCCI said it remains open to further consultations and will participate in upcoming oral hearings as Parliament continues to review the proposed law.