Kenya: Alarm Over Smuggled Tanzania Cheap Sugar

AN increase of counterfeit sugar from Tanzania coming into Kenya has raised an alarm in the industry with a key sugar miller warning the illicit trade is posing a major threat to local players.

Tanzanian middlemen are exporting thousands of tonnes of cheap smuggled sugar into Kenya to reap from a shortage of the commodity here. But this has meant low uptake of local sugar exposing millers to a bleak future.

"The counterfeit sugar business has been on the increase and has greatly affected output of sugar millers," SonySugar Managing Director Paul Odola said in a press statement. Odola was speaking after a five tone consignment was impounded by the company's security and CID officers based in Migori, Kuria district. The 5,100 kg counterfeit sugar was packed in Sony Sugar and Mumias packets.

During the raid, six people were caught with branded packaging materials from the two millers. In total, 93 fake 50 Kgs sacks of sugar bearing Sony Sugar logo and 17 empty bags bearing Mumias Sugar logo were impounded. Five electric sealers and one weighing machine were also found.

This was second raid within a month for counterfeit sugar originating from the Kenya- Tanzania border. Early this month, 400 bags of counterfeit sugar packed in fake 50 kgs Sony Sugar bags were nabbed in Kokuro along Migori-Kisii Highway. The matter has been forwarded to the Kenya Revenue Authority for investigation. "Sony Sugar cannot compete with the illegally imported sugar which is suspected to be originating from Tanzania as they don't pay taxes whereas Sony Sugar pays up to 20 per cent in taxes on each tonne of sugar sold in form of VAT, Sugar Development Levy and other levies," Odola said.

He added that if the trend is unchecked, counterfeit sugar has the potential of not only crippling the entire sugar industry in Kenya but will also deny the government relevant taxes. We are calling upon the relevant government agencies to take action and be more vigilant to avoid loss of revenue for the government and also prevent a situation whereby citizens may c"onsume sugar that has not been cleared by Kenya Bureau of Standards," the MD said.

Unscrupulous traders along the border have been cashing in on the shortage of sugar in the country by illegally importing sugar from Tanzania and taking advantage of the high prices in Kenya. "The profitability and market share of Kenyan sugar companies and others involved in manufacture of fast moving consumer goods have been negatively affected by counterfeits and pirated products," said Odola.

Stakeholders have in the past raised alarm over trade on illicit and counterfeit products saying the trade is threatening the manufacturing industry and competitiveness of the East African Community. Experts say the trade type, which includes counterfeits, smuggling, piracy and other violations of the intellectual property rights, has undermined the need for a stable and open marketplace that is fundamental for improving competitiveness and increasing investments.

A range of fake products is being traded in the region. Such products include sugar, dry cells, alcohols, fruit juices, shoe polish, toothpastes and toothbrushes, soaps and detergents pens and books. The Organisation for Economic Cooperation and Development estimates that the region has cumulatively lost about $500 million (Sh700 billion) in recent years in missed revenues due to trade in fake products.

source: allafrica