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Counterfeit cigarettes strangle BAT-Kenya revenues

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By Brian Yatich
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Cigarette maker, BAT Kenya has expressed fears that the high number of fake cigarettes coming into the local market could cripple its future operations if nothing is done about poor border controls.
The Nairobi Securities Exchange-listed company said yesterday that the black market trade for tobacco is gradually eating into its revenues by up to 5 percent, and now the manufacturer wants stiffer measures taken to avert the threat.
 “The shadowy nature of this trade makes the scale of it hard to estimate, but the company is losing up to 5 percent on this trade. Our research methods however with the help of the government can help control the vice,” said British American Tobacco (BAT) Kenya’s managing director Keith Gretton said during the launch of the company’s Sh152million warehouse facility in its Nairobi factory.
The company, a unit of London-listed British American Tobacco posted an 8 percent rise in its first half pretax profit to 2.77 billion shillings helped by improved sales and a favorable exchange rate on export sales.
Meanwhile Industrialization and Enterprise Development Cabinet secretary Aden Mohammed has said the government through Anti-counterfeit Agency (ACA) in partnership with police service commission, will train over 100 police officers to be trained and deployed to deal decisively with the counterfeit products entering the country.
“Kenya is losing millions of money to unscrupulous business activities due to fake products illegally manufactured and sneaked into the country from outside,” said the CS, adding that the move would also see the current number of inspectors deployed at the borders points across the country increased in the hope of addressing the runaway black market trade in the country.
Research indicates that up to 600 billion cigarettes are illegally smuggled yearly, counterfeited or tax-evaded contributing up to 12 percent of world consumption.

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Business Journalist since 2009, has worked for Financial Post, Standard Media Group, Business Journal and People Daily Chief Editor at The African Business Fortune Magazine Hobbies: Singing, Interacting and Reading Comics
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