Alcohol Manufacturers Urge National Assembly to Nullify New Waste Regulations, Citing 70% Cost Increase
The Alcoholic Beverages Association of Kenya (ABAK) has called on the National Assembly to nullify new waste management regulations that they claim will increase the cost of production by up to 70%. The Sustainable Waste Management (Extended Producers Responsibility) Regulations 2024 (EPR Regulations), currently under review by Parliament’s Committee on Delegated Legislation, aim to impose charges on materials used in packaging manufactured products and hold manufacturers responsible for managing post-consumer waste.
ABAK argues that the regulations, designed to promote sustainable waste management, will place an undue financial burden on the alcoholic beverages sector. The proposed changes include a KES 150 per item fee on imported packaging materials, an annual operating license fee of KES 100,000, and a 5% fee to be withheld by the National Environment Management Authority (NEMA) from registered producer responsibility organisations (PROs), among other charges.
Eric Githua, ABAK Chairman, expressed concern that these fees would lead to what he described as “double taxation.” He explained that manufacturers would pay the KES 150 fee on imported packaging and, in addition, contribute to PROs for post-consumer waste management, leading to unnecessary cost inflation. “At a fee of KSh150 per item, and with the broad categories of goods targeted, the cost of production in the alcoholic beverages industry is going to increase by 70 percent,” Githua stated.
The association also voiced concerns over the ambiguity of the new fee structure. Specifically, the lack of clarity about what constitutes an “item” for the purposes of the fee could lead to inconsistencies and potential abuse. Furthermore, ABAK noted that the regulations were developed without adequate public participation, which they argue was a critical oversight considering the potential impact on the manufacturing sector.
“The lack of public participation in the formulation of regulations whose implementation could lead to a 70 percent increase in the costs of production for the alcoholic beverages sector is a fatal sin of omission,” said ABAK Secretary Eric Kiniti.
ABAK has urged the National Assembly’s Committee on Delegated Legislation to reject the regulations and call for a thorough impact assessment, which includes consultations with all stakeholders. The association advocates for a collaborative approach, emphasizing the need for significant investment in infrastructure and consumer education to achieve sustainable waste management.
“Achieving 100% sustainable waste management requires time and strong collaboration between government and all stakeholders within the manufacturing ecosystem,” Githua added.
The outcome of the parliamentary scrutiny will determine the future of these regulations and their impact on Kenya’s manufacturing industry.
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