Alcoholic Beverages Association of Kenya (ABAK) Urge National Assembly To Nullify A Set Of New (EPR) Regulations
Alcoholic Beverages Association of Kenya (ABAK) Urge National Assembly To Nullify A Set Of New (EPR) Regulations
The Alcoholic Beverages Association of Kenya has asked Parliament to nullify a set of new regulations that, if implemented, could increase the cost of production by 70 per cent.
ABAK said the Sustainable Waste Management (Extended Producers Responsibility) Regulations 2024 (EPR Regulations) would end up causing more harm and derail progress made in sustainable waste management.
Alcoholic Beverages Association of Kenya (ABAK) Urge National Assembly To Nullify A Set Of New (EPR) Regulations
The regulations, which are undergoing scrutiny by the National Assembly’s Committee on Delegated Legislation, seek to impose charges on materials used in packaging manufactured products.
They are informed by the idea that a manufacturer’s responsibility over waste management should extend to post consumer waste stage, disposing packaging they use responsibly.
ABAK contends that the ministry responsible has overreached.
Speaking during a press briefing, ABAK chairman Eric Githua said “While we support all efforts to promote sustainable waste management, we are afraid that the EPR regulations are more likely to impose an unnecessary and heavy financial burden on the manufacturing sector,”
He added “The regulations carry the risk of making businesses untenable as they would increase the cost of making goods and drive it so high that the goods would be unaffordable to make and sell to consumers.”
They seek to introduce multiple fees, such as KES 150 per item on all imported packaging materials and finished goods, 5% fees which will be withheld by National Environment Management Authority (NEMA) from registered producer responsibility organisations (PROs), an annual operating license of KES 100,000 and a registration fee for producers and PROs.
Mr. Githua said that with the KES 150 per item fees on imported packaging material being paid in addition to the fees paid to PROs for post-consumer waste collection and management, that would amount to double taxation.
Alcoholic Beverages Association of Kenya (ABAK) Urge National Assembly To Nullify A Set Of New (EPR) Regulations
This is because manufacturers would in effect pay PROs a fee to manage post consumer waste on the same item for which they paid KES 150 at the point of importation.
The fee imposed per item is also ambiguous as it does not expressly state what constitutes of an item.
“At a fee of KSh150 per item, and with the broad categories of goods used in manufacturing that are targeted, the cost of production in the alcoholic beverages industry is going to increase by 70 per cent,” said Mr. Githua.
ABAK is of the view that KES 100,000 per year should be set at the KES 10,000 per annum as had been proposed when the draft regulations were shared with the public for comments.
ABAK Secretary Eric Kiniti said the manufacturers and distributors of alcohol in the country are also concerned about how the new regulations were developed as there was inadequate public participation.
“The lack of public participation in the formulation of regulations whose implementation could lead to a 70 per cent increase in the costs of production for the alcoholic beverages sector is a fatal sin of omission,” said Mr. Kiniti.
He said that the draft that was published and is now before the Committee on Delegated Legislation included provisions that had not been discussed, such as the fees charged per item, which is ambiguous and open to abuse, double taxation due to the payment for waste management on importation and at post-consumer waste level, and a 10-fold increase of the registration fees.
ABAK has urged the National Assembly Committee on Delegated Legislation to annul the regulations and ask the Ministry of Environment to conduct an impact assessment of the new charges and involve all stakeholders in the development of regulations that would promote manufacturing.
“A great deal of investment in infrastructure and consumer sensitisation is required to achieve 100% sustainable waste management. This can only be achieved over time and through strong collaboration between government and all stakeholders within the manufacturing ecosystem,” said Mr. Githua.
