Tax reduction boosts demand for sorghum

A customer is served with beer, Senator Keg. Demand for sorghum has tripled this year after the government cut excise duty on Senator Keg. PHOTO | DENISH OCHIENG | NATION MEDIA GROUP 

In Summary

• In May this year, President Uhuru Kenyatta reversed the charge through the Alcoholic Drinks Control (Amendment) Bill 2015, favouring beer brewed using locally sourced raw materials.
• In 2009, EABL and development partners launched a project to support sorghum farming in the country, which has seen $3.6 million invested in the past four years.

By OTIATO GUGUYU
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Demand for sorghum has tripled this year after the government cut excise duty on Senator Keg.

In 2013, when the government introduced a 50 per cent excise tax on the low cost beer, demand dropped sharply.

In May this year, President Uhuru Kenyatta reversed the charge through the Alcoholic Drinks Control (Amendment) Bill 2015, favouring beer brewed using locally sourced raw materials.

The law offers a 90 per cent tax cut for drinks manufactured using at least 75 per cent sorghum, millet or cassava.

East African Breweries Ltd (EABL) Group Supply Chain Director Peter Vogtländer said the company is targeting 22,000 tonnes of sorghum this year.

“We are glad to note that the demand for sorghum has tripled this year, with tax revenues from Senator growing by 30 per cent during the last three months,” Mr Vogtländer said in Nairobi on Wednesday.

He was speaking during the East African regional conference on the sorghum value chain.

He said the value of the crop had grown from Sh12 million in 2009 to Sh710 million this year.

In 2009, EABL and development partners launched a project to support sorghum farming in the country, which has seen $3.6 million invested in the past four years.