Kenya: Retailers Demand Tougher Enforcement As Illicit Trade Threatens Kenyan Businesses

Nairobi — Kenyan retailers are calling for coordinated government action to dismantle networks behind illicit trade, warning that the growing circulation of counterfeit and untaxed goods is undermining legitimate businesses, threatening jobs and exposing consumers to unsafe products.

The Retail Trade Association of Kenya (RETRAK) says enforcement agencies must shift their focus from seizing illegal products at retail outlets to investigating manufacturers, importers, distributors and financiers supplying the goods.

RETRAK Chief Executive Wambui Wamwiri said the rising trade was creating an uneven business environment in which compliant businesses were losing customers to traders selling cheaper products without meeting tax and regulatory obligations.

"Illicit trade is no longer a problem confined to our borders or hidden markets. It has found its way into everyday commerce, affecting products ranging from cigarettes, alcohol, sugar, cosmetics, clothing and motor vehicle spare parts, not to forget pharmaceutical products.

"The consequences go far beyond lost government revenue. Illicit trade is undermining legitimate businesses, threatening jobs, exposing consumers to unsafe products, and creating an unfair business environment for those who comply with the law."

Wamwiri said the association was pushing for five interventions, including coordinated intelligence-led enforcement, stronger investigations across supply chains, product authentication systems for retailers, greater public-private sector collaboration and accountability through publicly reported enforcement outcomes.

She contends that existing interventions, including seizures and destruction of illegal goods by agencies such as the Kenya Revenue Authority (KRA), Anti-Counterfeit Authority (ACA), National Police Service and Kenya Bureau of Standards (KEBS), needed to be complemented by investigations targeting the networks supplying the products.

The association also wants retailers to be equipped with accessible systems to verify excise stamps, product authentication marks and supplier documentation, while strengthening their responsibility to reject goods whose origins cannot be established.

Meanwhile, Michael Muthami, National Chairman of the Pubs, Entertainment and Restaurants Association of Kenya (PERAK), said the country did not necessarily need additional legislation but stronger implementation of existing laws.

He questioned whether proposed changes under the Alcoholic Drinks Control Act 2026, including raising the legal drinking age from 18 to 21, would directly address illicit alcohol trading.

Muthami called for a national multi-agency forum bringing together government institutions, manufacturers, distributors and retailers to address smuggling, corruption and weaknesses in border enforcement.

According to Muthami,legitimate businesses risked shutting down if enforcement remained weak while additional licensing and regulatory requirements continued increasing their operating costs.

The retailers' concerns come against the backdrop of findings by research firm Kantar, commissioned by British American Tobacco Kenya, which estimated that illicit cigarettes accounted for 45 percent of the country's cigarette market in 2025, up from 34 percent in 2021.

The study estimated annual excise duty and VAT revenue losses at Sh10.2 billion.

Separately, figures presented to Parliament by the Anti-Counterfeit Authority indicated that illicit alcohol accounted for approximately 59 percent of consumption in Kenya, with an estimated economic cost of Sh71 billion in 2022.

Read the original article on Capital FM.