EABL explains hike in price of beer

East African Breweries Limited (EABL) is in talks with retailers over arbitrary increases in the price of products.

Following the introduction of excise duty on December 1, 2015, the average cost of beer went up by Sh30 per 500ml bottle.

The brewer then adjusted its cost by increasing the price of beer by Sh10, absorbing on average Sh15 to Sh20 per 500ml bottle.

However, EABL has raised concern that most retailers hiked costs by as much as Sh60 and is now affecting sales of products.

“We took the decision to absorb part of the cost increase so that we could ensure consumers get safe products at affordable prices. We therefore think that retailers are using the price increase to hike profits, which is unfair,” EABL Kenya Sales Director Kimani Kirore Mwaura said in an interview.

According to Mr Mwaura, studies show that in Africa the cost of beer should be a dollar or less. With a retail price of Sh140 for its flagship brand Tusker, he feels that the cost of beer is to high and if not addressed could lead consumers to illicit brews.

“A retailer has the right to make profit. But what we are saying let them do it in a sustainable manner,” he said adding that it was unfair to consumers.

EABL announced a half-year net profit of Sh7.7 billion for the period ended December 2016.

During the six-month period, Sales of mainstream beers, including Tusker, dropped by 10 percent while premium beers such as Tusker Malt grew by a similar margin.