The government has seized contraband and counterfeit goods worth Sh10.9 million since the Rapid Results Initiative (RRI) was launched three weeks ago to fight the menace in Rift Valley Region.
Regional Commissioner Mr Maalim Mohammed said over 20 suspects arrested during the operation to get rid of counterfeit goods, illicit brews and narcotic substances in the region have been charged in court.
He stated that the government under the multi-agency framework has heightened the war against counterfeits and substandard goods to insulate Kenyans from harm that may arise from the use of such commodities.
“Counterfeit and illicit goods are not only dangerous to people’s health but also affect the business of local manufacturers. We are here to promote and facilitate legitimate trade such that the businesses taking place in our country are legitimate and products which are going to be sold in our markets are safe for the people and our country,” he explained.
The 100-day RRI that was launched on November 16, is headed by Mr Maalim and draws its membership from National Government Administration Office (NGAO), the National Police Service, Kenya Revenue Authority (KRA), Anti-Counterfeit Agency (ACA), the National Authority for Campaign against Alcohol and Drugs Abuse (NACADA), the Directorate of Criminal Investigations (DCI), local administrators, and the Kenya Bureau of Standards (KEBS).
The Regional Commissioner stated that the multi-agency team is also working with the cybercrime Unit, the directorate of criminal investigations units and the Information Communication Technology (ICT) Authority to tame online counterfeiting.
He observed that the near similarity of the design and colour combination of the fake goods to that of the genuine ones was likely to confuse the public.
According to the administrator the most common counterfeited goods in the country are fast moving high value consumer goods such as alcoholic beverages, gas cylinders, juices and health drinks. He said the counterfeits ring targets fast moving consumer products because of the volume and the money involved.
Also netted during the operation were 626 rolls of cannabis sativa, 100,000 litres of Kangara and 8,300 litres of busaa.
Mr Maalim said the government had every reason to deal with those in the illicit liquor trade as they had no value chains, further limiting economic impact.
The administrator noted that the proliferation of cheap and illegal liquor, whose supply and consumption tends to rise sharply towards Christmas and New Year festivities, called for strategic and sustainable efforts to fully eradicate illicit alcohol in future.
Making his presentation during a sensitization workshop on counterfeits held for police commanders and departmental heads at the Regional Commissioner’s plenary hall in Nakuru and organized by the Anti-Counterfeits Agency (ACA) Mr Maalim urged consumers to ensure they bought their products from authentic points instead of the counterfeits retailing at cheap prices.
Consumers were also encouraged to cultivate the culture of inquiring clear product information on quality and huge price variations from the traders and also demand product warranty.
“Kenyans should also be extra vigilant when buying mobile phones, motor vehicle spare parts, electrical and electronic appliances, building materials, pharmaceuticals, footwear and clothing, cosmetics, sportswear, toners and equipment of premium trademarks among others. It is better for parents to buy books from authorized bookshops and text book dealers rather than buying books which are being hawked in the streets,” he warned.”
The Multi-Agency operation is being extended to bar operators licensed by county governments and high-end wholesale and retail outlets as it has emerged that counterfeiters are also targeting expensive alcohol brands in the market.
“In the past authorities have been training their eyes on cheaper brands, but we will not be thrown off track by fraudsters counterfeiting premium and luxurious whiskies, brandy and vodka. Dealers in fake products are also increasingly targeting far-flung villages. We have tightened surveillance in major towns but even if they go to remote areas, we will pursue them,” affirmed the administrator.
The Kenya Revenue Authority (KRA) has documented several cases where illegal manufacturers have been packaging substandard alcohol in premium brand bottles complete with KRA excise stamps and even manufacturer and distributor batch numbers even as the latter disowned some of the brands insisting the batch numbers were fake.
Mr Maalim said besides posing serious public health and safety challenges the illegal dealers in the alcoholic beverages industry do not pay tax and thus deny legitimate players a level-playing ground and economy the much-needed revenues to grow.
Statistics from the Kenyan Revenue Authority (KRA) indicate that local manufacturers lose $42 million (Sh5.1 billion) to counterfeiters. Conservative estimates have suggested the government loses between Sh50 billion and Sh200 billion in potential revenue to counterfeits every year.
“We also want to assure the genuine traders and public that the government is out to facilitate and not frustrate traders. We are strongly combating all forms of illicit trade in the interest of promoting a fair-trade environment and protecting the rights of genuine traders, promoting our local manufacturing industry, safeguarding jobs and improving the ease of doing business,” added Mr Maalim.
The administrator observed that it was an offence to import into Kenya goods whose Intellectual Property Rights (IPR) have not been recorded with Anti-Counterfeits Authority (ACA) adding that all recorded IPRs are accorded proactive protection against counterfeit imports in accordance with the provisions of the ACA.
He warned that a person convicted of trading, manufacturing, hiring out, exhibiting for sale, importing, or transiting fake goods through Kenya is liable to a fine of not less than three times the value of the prevailing retail price of each counterfeit item or article under the current law.
“The fine can be substituted or accompanied by up to five years in jail. Repeat offenders face a maximum of 15 years imprisonment or a fine of at least five times the value of the prevailing retail price of the counterfeited goods under section 35 of the Anti-Counterfeit Act, 2008,” explained the administrator.
East African countries continue to suffer from counterfeits which range from household products such as toiletries, foodstuffs and chemical products to cell phones and other electronics.
The Kenya Association of Manufacturers (KAM) estimates that Kenyan manufacturers have been losing at least 40 per cent of their market share to counterfeiters, the same percentage Uganda recorded in the 2021 research by the Economic Policy Research Centre (EPRC), which indicated Ugandan businesses felt that they suffered due to unfair competition from counterfeiting and cheap substandard products.
Similarly, a recent research report by the Confederation of Tanzanian Industries (CTI) found that the majority (92 per cent) of the 17 companies interviewed indicated a 10-30 per cent market share loss, as well as a loss of annual turnover due to the counterfeiting of their products. As a result, the Tanzanian government faces significant losses in tax revenue.
The problem is compounded by a lack of awareness among consumers, particularly regarding existing, relevant legislation which means that consumers do not generally know their rights, differentiate genuine and counterfeit thus easily being exploited by criminal syndicates.
Participants at the workshop called for cooperation among East African states, not only to harmonize national legislation with regional instruments but also to enhance controls along porous borders and combat corruption.
The negative impact is felt across the entire economic system. Consumers who buy counterfeit products end up paying huge amounts for defective and sometimes harmful products, manufacturing companies lose their credibility, and the government misses out on tax revenues, which are instrumental for sustainable growth.
By Jane Ngugi and Dennis Rasto