IEA launches the Study on the Unintended Effect of Kenya’s Alcohol Regulation Policies

Post Date: 02 May 2019   |   Category: General   |   Hits: 835

The Institute of Economic Affairs (IEA-Kenya) launched a white paper titled “The Unintended Effect of Kenya’s Alcohol Regulation Policies” on Tuesday, 30th April 2019 at the Serena Hotel, Nairobi.

The paper released by the Institute of Economic Affairs and Kenya Association of Manufacturers notes that Kenya needs to develop a more comprehensive policy if its fight against illicit alcohol is to succeed. The analysis has shown that the approach taken to regulate alcohol is population-based rather than targeted at reducing excessive drinking. It further states that Kenya’s alcohol policies should not be exclusive but encompass a mixed approach involving Problem Directed Policies and Intervention Policies as these have been proved to work elsewhere. 

Population Based Policies are easier to administer but are unlikely to be most successful in Kenya given the low per capita consumption of alcohol, demographic changes, dual market structure and expected income growth among Kenya’s working population, reads the paper.

Data from the World Health Organisation shows the per person consumption of alcohol in Kenya stood at 3.4 litres of pure alcohol in 2018, much less than the global average of 6.4 litres per person.

Of the 3.4 litres, says the WHO, 1.9 litres is recorded (legally recognized) while 1.5 litres is unrecorded (not officially recognized). 

Speaking during the launch of the day-long summit on illicit trade in Kenya, Mr. Kwame Owino, Chief Executive at the Institute of Economic Affairs said that Regulation of the alcohol beverage sector is through the Alcoholic Drinks Control Act, which by reducing the amount of time for drinking and limiting the advertising of alcohol, assumes that it solves the problem of heavy drinking. But that does not work and more people are pushed towards illicit alcohol. By suppressing one side, you go back to the other side. Our licensing model actually creates barriers to market entry.

The report further reveal that with the excess regulation that the recorded alcohol is subjected to more consumers are pushed towards the alcohol that is not officially recognised, and which bears risks for drinkers.

In sum, excessive regulation can generate the unintended consequences of driving demand for alcoholic beverages in the informal sector and generate worse health outcomes owing to the production methods employed in the latter. 

A resolution paper will be developed from the submissions made at the summit and submitted to Treasury for consideration.

Follow the link to download/view the presentation made by Mr. Kwame Owino during the summit: