Economics - East Africa - Kenya - Netherlands - Trade - Finance
Dutch company to make beer more affordable to Kenyans despite tax hikes
Dutch brewer Heineken has re-entered the Kenyan beer market, wielding what it called a ’green-label’ specifically designed to appeal to environmentally-minded drinkers.

Heineken, a brand sold in over 170 countries worldwide, was formally introduced in Kenya a year ago through a local franchise, but is yet to fully penetrate the local market, despite its popularity with young drinkers.

Heineken Regional Manager Isaac Nyanteh said on Thursday the official launch of the beer into the local market would not heighten competition with the dominant player, the East African Breweries (EABL)

EABL has remained the region’s largest brewer, selling on average 3 million hectoliters of beer in Kenya alone - accounting for nearly 90 percent of the local market.

But the Kenyan government has made the huge earnings from beer sales as its top target for taxation.

In June this year, authorities hiked the tax on a bottle of beer by 5 Shillings, leading to price increases.

However, Ngugi Kiuna, the Managing Director of Maxam Limited, a Kenyan firm holding the franchise for Heineken since March 2007, said the distributors would not hike the retail price of the new brand.

"We are ready to absorb the increased taxation to make this beer more affordable to a majority of Kenyans," Kiuna told journalists.

Heineken executives said the firm had invested 40 million euro to produce synthetic packages and labels on the beer bottles to make the bottle more attractive and transparent to consumers.

"This has helped us to cut down on the amount of paper that we used previously on making paper labels, this has saved the environment by decreasing the demand for the falling of trees," Nyanteh said.

Local competitor EABL has been promoting a 300-million trees drive to show its green credentials in the wake of fresh global concerns over the greenhouse gases and the need to reduce global gas emissions.


Kenya

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