The Retail Trade Association of Kenya (RETRAK) has called for a coordinated, multi-agency effort to dismantle illicit trade networks that it says are endangering the economy and costing jobs.
A Kantar study estimates that illicit cigarettes made up 45.1 per cent of the market in 2025, up from 34.1 per cent in 2021, generating excise duty and VAT losses of KSh10.2 billion in 2025 and KSh47 billion between 2021 and 2025.
Figures presented to Parliament by the Anti-Counterfeit Authority (ACA) indicate that illicit alcohol accounts for about 59 per cent of Kenya’s alcohol consumption by volume, with an estimated economic cost of KSh71 billion in 2022, while the ACA’s firm-level survey found counterfeit goods averaging 18 per cent across surveyed sectors, including 21 per cent of motor vehicle spare parts and 19 per cent of alcoholic drinks.
The ACA seized counterfeit goods valued at more than KSh563 million in the first three quarters of the 2025/26 financial year, and the Kenya Revenue Authority (KRA) destroyed fake and illicit products worth KSh218 million in July and intercepted nearly 100 tonnes of smuggled sugar in Lodwar and Marsabit.
RETRAK is urging the Kenya Revenue Authority, the Anti-Counterfeit Authority, the Kenya Bureau of Standards and the National Police Service to agree on a joint enforcement framework, designate a lead agency and publish a timeline for reporting progress.
The association also wants practical tools for retailers to verify excise stamps and authentication marks, rapid guidance on suspicious deliveries and safe, confidential channels for shop staff and the public to report suspected illicit goods.
RETRAK chief executive Wambui Mbarire said that seizing illegal products from shops is only the first step and that investigators must trace suppliers, storage locations, transporters and financiers to disrupt the networks.
Pubs, Entertainment and Restaurants Association of Kenya (PERAK) national chairman Michael Kiragu warned that enforcement agencies have failed to implement existing measures and questioned whether proposals in the Alcoholic Drinks Control Act 2026, such as raising the legal drinking age to 21, would curb illicit alcohol.
Kiragu added that porous borders, especially from Uganda, allow alcohol, cigarettes and even mattresses to cross without tax, and that additional licences and regulatory requirements could weaken legitimate businesses without stopping illegal operators.
RETRAK argues that compliant retailers are losing market share to smugglers and counterfeiters who evade taxes and regulatory costs, leading to reduced investment, operational cuts and the risk of business closures.
