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Tobacco firms have petitioned the Government over counterfeit tobacco products.
The companies said despite legislation to aid in stopping illicit cigarette trade, authorities have done little and the invisible ‘industry’ is threatening to rule the market.
Cigarette makers say since the Tobacco Control Act was enacted, no one has been fined or imprisoned for the vice, hurting the multi-billion shilling industry.
Mr Josh Kirimania, Head of Corporate Affairs at Mastermind Tobacco Kenya (MTK) said counterfeiting of cigarettes has grown quickly over the last year.
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As the world marks five years since the first framework on tobacco control came into place, the World Health Organisation (WHO) has raised concerns over an increased number of young girls smoking cigarettes in Kenya.
In an exclusive interview with Capital News, WHO Programme Officer in charge of Tobacco control Dr Joyce Nato said the latest statistics indicated that the ratio of young boys and girls smoking cigarettes is one-to-one, an increase from a 2001 report which indicated that in every 10 school going boys who smoked, only one girl smoked.
"This is a big worry because it means that our girls are picking up smoking very fast and tobacco use in girls is even more dangerous," Dr Nato said. . . .
Capital News spoke to a young lady who said she had been a smoker since she was in second year at the university.
"I find it cool to smoke. I grew up in a single parent family. My mum used to smoke and I admired it," Cassandra said.
Use of wood to cure tobacco is causing an environmental crisis in tobacco growing areas of Migori, Kuria, Uriri and Rongo districts even as a new law pushes afforestation programmes to farmers.
Under the Forestry Act set to come in force in May, farmers are required to put a tenth of their farms under trees but the requirement may not be enforceable as farm sizes become increasingly smaller due to subdivision.
Speaking in Kisumu during the Nyanza provincial land preparation field day, agriculture minister William Ruto said tree nurseries would be established in all divisions to enable farmers support environmental conservation programmes.
Tobacco farmers from Migori, Kuria East and Kuria West districts continue with their lavish lifestyle as their payouts were boosted by more than Sh30 million this week.
The leaf-buying companies are paying them daily through local banks.
Long queues have become the order of the day in local banking halls as the growers receive their payments from BAT Kenya, Alliance One Tobacco and Mastermind companies.
Staff at the Migori Postbank on Monday said they were paying up to 500 farmers a day.
The tobacco-growing districts of Migori and Kuria have recently sprung to life after leaf-buying companies paid out over Sh20 million to farmers.
Lifestyles have changed overnight with some men marrying additional wives. Others are painting the town red, camping in bars and hotels for several days and drinking away their fortune.
Unconfirmed reports say a farmer lost Sh100,000 to a prostitute who drugged him. The Sunday Nation could not trace him to give his account. But a spot check showed commercial sex workers from as far away as Kisumu, Kericho, Nakuru and Tanzania have descended on the region.
Alliance One Tobacco, BAT Kenya and Mastermind Tobacco have been organising investment workshops for their more than 15,000 contracted farmers in the region. But it appears their efforts have done little to change lifestyles here.
A new protocol to be discussed and signed by governments at a meeting in Geneva in March is expected to boost the war on illicit trade in tobacco products as it will make it possible for countries to disclose bank accounts of suspected smugglers.
Smugglers in east Africa are suspected to use their wide networks stretching across the war ravaged Somalia and DR Congo to peddle illicit tobacco products through the porous borders and escaping tax in the process and accumulating revenues which are deposited in several banks across the region.
If signed by governments attending the Geneva meeting, the protocol is expected to become an international convention to eliminate illicit trade in tobacco products across the globe.
The draft protocol, to be debated in Geneva in March, could prohibit manufacturers across the globe from using the internet, telecommunications or any other evolving technology based modes to sell tobacco products or manufacturing equipment used in the production of cigarettes. . . .
Mr Collin Denyer, a senior investigations manager at tobacco giant BAT, told an anti counterfeit meeting in Nairobi late last year that the Kenya government was losing upwards of Sh1 billion in revenue because of sale of fake cigarettes.
The Tobacco in Kenya report offers a comprehensive guide to the size and shape of the market at a national level. It provides the latest retail sales data (2002-2007), allowing you to identify the sectors driving growth. It identifies the leading companies, the leading brands and offers strategic analysis of key factors influencing the market - be the new legislative, distribution or pricing issues. Forecasts to 2012 illustrate how the market is set to change.
Contraband cigarettes continue to enter Kenya through porous border points despite a promise by the government to stem the smuggling wave.
Local cigarette manufacturer Mastermind Tobacco cites Malaba, Busia, Lwakhakha, Port Victoria and Chepkube as the points at which cigarettes from Dubai and India enter the country.
The players in the illicit trade are also said to use Eldoret Airport and the Mombasa port to transport the contraband.
“Cigarettes sourced from Dubai and India find their way into the Kenyan market through the port of Mombasa,” reads the report.
Over the past year, the cigarette manufacturers have lost Sh7.5 billion in revenue due to the trade.
Lack of co-operations from authorities in dealing with culprits is weighing down on the industry, players claim. According to information available to the Nation, several raids have been conducted and suspects apprehended.
However, the prosecutions have failed the fight, leading to loss in revenue by the authorities as in most cases suspects walk away free. It is estimated that Kenya looses billions of shillings annually to the trade of illegal cigarettes. Independent sources say that the scheme is a cash cow and governments and companies are suffering the consequences.
In a recent article on smuggling of cigarettes in the East African Community, Mr Enoch Walugembe of BAT said companies loose about Sh225 million while traders loose about Sh150 million annually. “This about 25 per cent of the cigarette consumption causing the loss of Sh7.5 billion a year in tobacco taxes,” said Mr Walugembe.
The war between the tobacco industry and various social organisations has gone a notch higher with lawyers allied to the African Tobacco Alliance and the Campaign for Tobacco Free Kids calling on the government to tighten its control legislations, to reduce the number of smokers in the country.
Chairperson of the Africa Tobacco Control Alliance (ATCA) Rachel Kittonyo said on Saturday that more than 18.2 percent of boys and girls in Kenya aged between 13 and 15 were currently smoking.
"These are very worrying figures because in 2001 the figure was at 11 percent. This means that in a span of seven years the figure has almost doubled. If we do not do anything about it then in the next seven years, the figures will have shot up even higher," she stated.
Pamela Lambert, an official of Tobacco Free Kids, held that a concerted educational effort on the harmful effects of tobacco between the Kenyan government and citizens would reduce the number of smokers, noting that education had seen the number of smokers in developed nations go down.
Public health officers will be involved in the enforcement of smoking regulations across the country.
Public Health and Sanitation Minister Beth Mugo said that already, 80 public health officers have been trained as public health prosecutors to strengthen their capacity to enforce the Tobacco Control Act (2007) among other public health statutes.
Mrs Mugo added that a continuing programme has been launched for tobacco enforcers and public health officers, police officers, among others, are involved.
She said that the training would ensure that all towns in the country are free from tobacco smoke.
For BAT-Kenya shareholders, however, smoke has meant one of the highest returns at the Nairobi Stock Exchange in the past one year, making a mockery of the bourse’s one-year bearish run.
The returns have been two-fold, in price appreciation and dividend pay-out. On January 21, for example, BAT shares were selling at Ksh137 ($1.75), but by June 24, the price had risen to Ksh170 ($2.2), an appreciation of Ksh43 (US 55 cents).
A shareholder who bought into the company on January 21 would, however, have made a bigger killing, given that BAT-Kenya paid a final dividend of Ksh12.50 (US 16 cents) on April 30.
Taken together, the price appreciation and dividend payout mean that the total gain per share for the investor would have been Ksh55.50 (US 71 cents) by last week, equivalent to a 41 per cent gain in investment in just four-and-a-half months. Globally, annual gains of around 10 per cent on capital are considered good.
The gains registered by the BAT stock far outstrip those made by the NSE over the last four weeks, when the bourse registered some recovery pressure.
Rachel Kitonyo may not be a favourite with tobacco manufacturers and smokers in Kenya due to her recent work in tobacco control. In fact, if she was to have her way, Kitonyo would be perfectly happy in a Kenya where no one smoked and no lawful tobacco growing, manufacturing, advertising and usage was taking place.
"If no one smoked, we would be happy," says the executive director of the Institute of Legal Affairs. However, her brave and dedicated work through the institute in helping draft regulations under the Tobacco Control Act 2007, drafting and lobbying for the passing of the Act and in drafting subsidiary legislation to ban smoking in public places under the Public Health Act have received international acclaim from the Campaign for Tobacco-Free Kids and the Wilkenfeld family, leading to her being awarded of the second Judy Wilkenfeld Award for International Tobacco Control Excellence. . . .
Kitonyo's initial idea of a career in law was the life of glamour with a prestigious law firm. A road accident that left her with a broken arm and dislocated knee, was to however change her focus and become a lawyer of a different kind. . . .
The first Bill they picked was the Tobacco Control Bill, which had stuck in Parliament since 1998 due to strong lobbying against it by the tobacco industry.
The draft in Parliament was a weak one that did not even meet the minimum requirements as set by the Framework Convention on Tobacco Control (FCTC) to which Kenya was a signatory. The convention gave minimum requirements for tobacco control in legislation and a country was supposed to enact domestic legislation based on that.
It was also a Bill that affected the largest number of Kenyans, smokers, non-smokers and the economy.
As Christians they believed that any addictive stuff should not be allowed. Smokers, who are at a national average of 12 per cent, also needed to be protected from slowly but surely killing themselves.
Cigarette manufacturers risk prosecution if they do not adhere to the Tobacco Control Act that calls for pictorial warning messages on the cigarettes packs.
The Ministry of Public Health and Sanitation says that the Act which obligates players to give both words and pictorial messages is in force.
The Chairman of the Tobacco Control Board Prof Peter Odhiambo said the deadline or compliance with the new law has run out.
"Pictorial messages will be more effective than just written words because we know that we have some cases in rural areas where some people cannot read. Tobacco health warnings are therefore strong defenses," he said.
The government has proposed new measures to outlaw smoking on the streets and raise the price of cigarettes.
Public Health and Sanitation minister, Beth Mugo, has proposed amendments to the Tobacco Act to ban smoking on the streets countrywide.
Section 33 of the Act prohibits smoking in restaurants, public buildings, factories, hospitals and other public places but says nothing about the streets.
Some local authorities such as the City Council of Nairobi, Nakuru Municipal Council and Kangundo County Council have passed by-laws banning smoking on the streets.
The ministry has also asked Treasury to increase excise duty for Tobacco products to force more people to abandon smoking.