The Kenyan dairy industry has really performed well over the last 10 years with annual milk production doubling to >4 billion liters. It is important to note that >70% of the marketed milk is not processed due to a number of reasons including absence of formal (cold) marketing channels in some regions, better prices offered by informal milk traders to farmers, raw milk tend to be cheap for consumers, some consumers have developed a taste for raw milk etc.). To mitigate the risks associated with marketing of raw milk, the Kenya dairy Board (KDB) has in the past been involved in training and licensing of milk traders. For a trader to be licensed, he/she should have premises (a milk bar) for his business.

Although processed milk account for <30% of the marketed milk, the structure of the industry is such that it is dominated by a few but large players. In recent years, the number of big processors has actually fallen following the acquisition of Spin-Knight, Daima, Molo milk, Delamere dairies etc. by Brookside. And this is where I think the problem is emanating from. With reduced competition in the formal sector, it is likely that the few remaining big processing firms are attempting to make monopoly profits by offering very low prices to farmers and selling the processed milk at exorbitant prices to consumers.

Worse still, the big processors seem to be exerting some influence on KDB to outlaw sale of raw milk. Last week, after a report on some raw milk traders who were adding illegal substances in their milk, KDB decided to ban sale of raw milk. To me this is a very wrong approach as it fails to appreciate the fact that raw milk trading brings in competition in the industry which ensures that consumers get milk at low prices and farmers receive better prices. A better approach should have been to police informal milk trading, including de-registering and prosecuting those traders engaging in illegal practices.

Indeed talk by some raw milk traders’ is that the reported incidence could have been stage managed to trigger the ban on raw milk trading by KDB. If the ban is enforced, milk consumers will pay through their noses and consumption will suffer big time. Also, many farmers are likely to find themselves with no markets for their milk. So my advice to the industry regulator is to find a way of regulating the informal sector rather than killing it. My thoughts.

@QD, very possible what u saying up there!

goggles goggles goggles, is it just me who sees the growing monopoly by one Brookside and the increasing influence on KDB?