New Kenya Law Could Raise Food Prices Further

Posted on 8 July 2008. Filed under: Economy, Food Security, Governance |

Photo: Julius Mwelu/IRIN
Some of the products, with the standardization mark, on a supermarket shelf

NAIROBI, 4 July 2008 (IRIN) – Prices of food in Kenya, which have already risen by 50 percent since the start of 2008, could increase further following a new government regulation, a consumer watch group has warned.

From October, all food products sold in Kenya will have to bear an approval mark from the country’s bureau of standards (KEBS), which will charge a fee for this service.

“Manufacturers and producers, who have a turnover of below 200,000 shillings [US$3,125] each year, will pay 5,000 shillings [$78]. Those with a turnover of 200,000-500,000shillings [$7,812] will pay 10,000 shillings [$156],” John Abongs, the general manager of quality assurance at KEBS, told IRIN.

“Producers will be forced to pay higher prices to bring their products to the market,” Su Kahumbu, the coordinator of Consumer-Watch Kenya and an organic farmer, said on 1 July.

“The regulation does not take into account the impact on producers, particularly small scale producers, or the consumers who are the end-users of the products,” she added.

Photo: Julius Mwelu/IRIN
Su Kahumbu, the coordinator of Consumer Watch Kenya

Kahumbu said the fees were too high for small-scale producers. “It should be free for them to acquire the mark, we [farmers] are already paying taxes through the nose”.

She added that the regulation could force some small-scale entrepreneurs out of business.

“This regulation will definitely increase food prices,” Eustace Kiarie, the national coordinator for the Kenya Organic Agricultural organization (KOAN) said. “Most producers are likely to factor in the costs of paying for the regulation when pricing their goods.”

Kiarie said even the lower fee for small-scale producers was too high, especially for those with more than one product line, “if I produce five different flavours of yoghurt, I will have to pay 5,000 for each flavour, that is 25,000 shillings [$390] in total. It’s not fair”.

Adan Ramata, a branch manager of a leading supermarket in the country, said some of the small-scale producers would have to withdraw their products from the shelves if they did not have the mark.

“It is an additional expense to them and it will be eating on the little they get,” Ramata told IRIN.

KEBS has warned supermarkets that they could face legal action if they sell products without the mark, Ramata said.

The Kenya Association of Manufacturers (KAM) had originally opposed the regulation, saying the first deadline for compliance, July 1, was too soon. A recent meeting between the association and KEBS officials led to the deadline being extended to 30 September.

Kahumbu complained that small-scale producers, who have no representative association, were not present at this meeting. She said the government’s intent to ensure quality goods in the market was laudable, but insisted should have consulted all stakeholders first.

However, some manufacturers support the new regulation.

Photo: Julius Mwelu/IRIN
Janet Abilla, senior trade development officer, Ministry of Trade

“I think it’s practical. It’s time we got rid of substandard goods in the market,” Anthony Maina an official with a local beverage company, told IRIN in a telephone interview.

Janet Abilla, an official in the ministry of trade, said the government had not yet come up with a solution to the demands of small-scale producers, but that it was looking into the matter.



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