The Government of Kenya rescinded a tax remission on excise tax for sorghum-based Senator (R) Keg Beer. This was going to adversely affect all value chain actors including smallholder farmers, grain aggregators, the brewer East African Breweries Ltd (EABL), retailers, non-governmental organizations and consumers. The tax remission would drop from 90% to 10%. The brewer responded by cancelling contracts for sorghum purchase and shutting down beer production lines leading to job losses. Due to decreased demand, the retailers also experienced losses.
SIA’s lead, Anne Wangalachi, jointly crafted and led a dynamic and impactful “Save the Sorghum” campaign against the planned increase in excise duty on sorghum-derived beer, involving several county governments, economic researchers, EABL, smallholder farmers, the media and non-governmental organizations. The policy think tank, Tegemeo Institute showed that if sustained, the excise tax level would lead to decreased tax revenue from the brewer from discontinued production of the Senator brand beer. The campaign highlighted the livelihood elements of improved sorghum production and marketing that had resulted from the ready market provided by the brewer and tracked the cost of various investments in the value chain to US $ 400 million. The campaign used both national level and grassroots level strategies to gain traction with the President, Finance Cabinet Secretary, National Parliament Committee Chairs on Finance and Agriculture, and garnered 1 million signatures against the petition to increase the excise tax.
US $ 400 million value chain in Kenya secured through the “Save the Sorghum Tax Advocacy” campaign
President Uhuru Kenyatta signed into law the Alcoholic Drinks Control (Amendment) Act, 2015 with provisions that outlined the conditions of production of non-malted beers. The Act granted a remission of excise duty at 90% with respect to beer made from sorghum grown in Kenya among other products if the licensed manufacturer uses at least 75% content of the product. The sorghum value chain actors won, and the government secured its budget.