RETRAK decries rising illicit trade in cigarettes, alcohol and counterfeit goods

NAIROBI, Kenya Nov 12 – The Retail Trade Association of Kenya (RETRAK) has raised concern over the growing trade in illicit cigarettes, alcohol and counterfeit goods, calling for coordinated enforcement to dismantle the supply networks behind the illegal business.

The association is urging the Kenya Revenue Authority (KRA), Anti-Counterfeit Authority (ACA), Kenya Bureau of Standards (KEBS) and National Police Service to adopt a joint enforcement plan, designate a lead agency and publish regular progress reports to strengthen public accountability.

RETRAK Chief Executive Officer Wambui Mbarire said enforcement agencies must move beyond seizures at retail outlets and investigate the suppliers, transporters, financiers and storage facilities involved in the distribution of illicit products.

“Seizing illicit products from a shop is only the beginning. Investigators must establish who supplied the goods, where they were stored, who transported them and who financed the consignment. Following that trail is how we disrupt the networks and prevent the next delivery,” Mbarire said.

The association cited figures highlighting the scale of illicit trade and its impact on public revenue, legitimate businesses and consumers.

A recent Kantar study estimates that illicit cigarettes accounted for 45.1 per cent of Kenya’s cigarette market in 2025, up from 34.1 per cent in 2021. The trade is estimated to have cost the government KSh10.2 billion in excise duty and VAT in 2025, and KSh47 billion between 2021 and 2025.

Figures presented to Parliament by the ACA indicate that illicit alcohol accounts for approximately 59 per cent of alcohol consumed in Kenya by volume, with an estimated economic cost of KSh71 billion in 2022.

The ACA’s latest firm-level survey found that counterfeit goods accounted for an average of 18 per cent of products in the sectors surveyed, including 21 per cent of motor vehicle spare parts and 19 per cent of alcoholic drinks.

Recent enforcement operations further illustrate the challenge. The ACA seized counterfeit goods valued at more than KSh563 million in the first three quarters of the 2025/26 financial year, while KRA destroyed fake and illicit goods worth KSh218 million in July. KRA also recently intercepted nearly 100 tonnes of smuggled sugar in Lodwar and Marsabit.

RETRAK is calling for practical tools to help retailers verify excise stamps and product authentication marks, alongside clear guidance on handling suspicious deliveries. It also wants safe and accessible channels through which shop workers and members of the public can report suspected illicit goods and receive feedback on action taken.

Mbarire said legitimate retailers were being disadvantaged by operators dealing in smuggled and counterfeit products while evading taxes and regulatory requirements.

“Retailers who meet licensing requirements, keep proper records and source goods legitimately cannot compete fairly against operators supplied by smugglers, counterfeiters and tax evaders. Illicit trade undermines compliant businesses, puts jobs at risk and exposes consumers to dangerous products,” she said.

The association wants enforcement agencies to make their results public, including progress in tracing major suppliers, prosecutions and the recovery of unpaid taxes.

“We need an accountable, sustained response, not isolated raids. Kenyans deserve to know whether investigations are reaching the sources of illicit products and whether offenders are being brought to justice,” Mbarire added.

RETRAK reaffirmed that retailers must conduct due diligence on suppliers, retain invoices and reject products whose origins cannot be verified. It said it was ready to work with regulators and enforcement agencies to develop guidance and awareness programmes for retailers of all sizes, including small traders.

Mbarire warned that illicit trade was not only an economic concern but also a threat to public safety, citing the risks associated with counterfeit alcohol and fake vehicle parts.

“This is more than lost revenue or unfair competition. Counterfeit alcohol can threaten lives, and fake vehicle parts can cause serious harm. Tackling illicit trade protects consumers, legitimate businesses, jobs and public finances,” she said.