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Mastermind Tobacco urges total crackdown on smuggling as revenues fall

By Mercy Simiyu October 20th, 2023 2 min read

Cigarette manufacturer Mastermind Tobacco has warned that the government risks losing millions of shillings in revenue if the smuggling of illicit cigarettes remains unchecked.

The second-largest tobacco producer in the country emphasized the need for close collaboration between government agencies, specifically the police and the Kenya Revenue Authority (KRA), to combat this growing issue, especially in the porous borders of Western Kenya where illicit products worth millions of shillings find their way into country and the market almost on a daily basis.

Just this week, police and KRA officials in Kakamega impounded contraband cigarettes valued at Sh14 million plus at least 40 bags of poultry feed worth Sh26,000 that had been smuggled into the country from Uganda.

During this operation, the officers apprehended one suspect.

These smuggled cigarettes were labeled as “Supermatch,” closely resembling the brand produced by Mastermind Tobacco in Kenya.

In response to the rising number of uncustomed “Supermatch” products infiltrating the Kenyan market from Uganda, Mastermind Tobacco was forced to alter its product branding.

In a statement, Mastermind Tobacco said: “We are deeply concerned by the increasing influx of illicit cigarettes into the country, particularly from Uganda. We are suffering significant losses in the market due to the proliferation of counterfeit products bearing our brand name, being sold at considerably lower prices, making it impossible for us to compete effectively. As we lose, the government is also losing.”

A recent survey conducted by British American Tobacco (BAT) revealed that Kenya is losing up to Sh6.5 billion ($45.67 million) annually in tax as a result of illicit cigarettes.

According to Western Regional Commissioner Irungu Macharia, the East Africa Common Market Protocol which came into force in July 2010 might be contributing to the illicit trade along the border.

This protocol promotes the free movement of goods, people, services, labor, and capital while guaranteeing rights to residence and establishment.

Early this week, a multi-agency surveillance team led by Kakamega Central Officer Commanding Police Division (OCPD) Valerian Obore intercepted fake cigarettes contained in 350 boxes and 40 bags of poultry feed at a home in Shivembe village, Lurambi Constituency.

The operation was initiated following g a tip-off from local residents who spotted a resident unloading ‘suspicious’ products from a lorry.

Police managed to arrest the lorry driver and have initiated a manhunt for his accomplices.

Western Kenya, with its porous borders, has become a thriving hub for contraband arriving from neighboring Uganda and Tanzania.

The thriving multibillion-shilling illicit trade in contraband and counterfeit goods is sustained by lethal and aggressive yet untouchable cartels.

These smugglers operate under the protection of unscrupulous customs officers, corrupt police officers, and other government officials who are complicit in this well-organized syndicate.

Some islands on Lake Victoria have gained notoriety for facilitating this illicit trade, costing Kenya millions in lost tax revenue.

In this trade, unscrupulous business people prey on restricted commodities and disrupt domestic markets and Kenyan producers.

The lenient court fines for offenders further exacerbate the problem, as those arrested can easily pay bail and be released to continue their illicit activities.

Frustratingly, smugglers often settle their fines promptly and resume their unlawful trade hence undermining efforts to combat smuggling.

The low fines and the return of impounded vehicles to their owners have eroded the motivation of law enforcement officers engaged in the crackdown. Some have proposed that the courts order the forfeiture of vehicles seized while transporting contraband to the State.

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