Govt shouls stop imposing this other side-irrelevant taxes on its cash cows(EABL)...
Wacha watu wanao kunywa wakunywe, wakisha kunywa the Govt can trust EABL to give it its fare share of taxes..rather than people rushing for lethal stuff..

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65% tax vs innovation?
Innovation can't beat 65% tax...
Only option EABL has is asking the government to enforce the 'law' against untaxed brews...
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All I'm saying is if they found a way of tapping into the illicit brew drinkers the govt. I'm sure will be willing to listen. The last time I heard eabl lobby for anything was the withdrawal of that alchoblow gadget from the roads.
I know they have done cheaper innovative brews like Senator and Kane but that was almost 10yrs ago. They now have new challenges that need new solutions because I doubt the person taking changaa for 10bob with a kick like a mule will buy a feather touch drink like a Senator mug for 30/-

Spirits are taxed on their strength (alcohol volume) aka 'proof'... so making a 'stronger' spirit (kumi kumi style) attracts higher taxes...

Like I said, you can try all you want but as long as the taxes are higher than the cost of production of the 'illicit' stuff... how can a tax-paying entity compete?

BTW, GoK saw the light & reduced taxes on spirits so EABL had better 2Q & expects a decent 2H

His first blander was losing the Safari7s to his biggest competitor.

I have always wondered why barley should be grown in Kenya, malted in Kenya, fermented in Kenya, bottled in Kenya and drunk by Kenyans... then >70% of profits taken to the UK. – Just because Diageo owns more than 70 % shareholding in this company directly and / or through proxies.

KBL and now EABL have had a very successful advertisement campaign over the years...appealing to the Kenyans and selling itself as a true Kenyan product. Unfortunately over the same period of time ownership, management and control of this former gem has slowly eluded us Kenyans.

It has also puzzled me that the most profitable company for a long time has been a beer manufacturing company and not an IT related company or a manufacturing company.

There is nothing illicit about beer or alcohol brewed at home. In many developing countries the large percentage of beer consumed is from small family owned establishments and from microbreweries – the multinationals only control a small chink of those markets.

Come to Kenya – my theory has been that these multinationals through their connections in governments, influence and money have managed to convince everyone including our legal system that any beer brewed outside their premises are illegal, dangerous and illicit. ALL ALCOHOL IS ILLICIT!!! Including theirs if we are to view brewing by this eye.

Given the necessary support, tax breaks, regulations.... the mama pima who sells “machozi ya samba”at mbotela would now have been a force to reckon with – she would even probably have listed her company at the NSE, JSE or LSE if not NYSE.

After all the Japanese have sake, Ugandans have Waragi etc.... it is time that we supported companies that have real business ethics.

It's good to see that EABL managed to get the president to open the new plant. I think he said something about the brewers looking at making cheap brews in hygienic conditions to fight illicit brews. Does not make a lot of sense but looks like EABL might be getting their lobbying right on taxes so I want to watch this stock after the budget. President and the Finance minister may see the need to do something about the illicit brews in Central.Right now PE 16.6 is okay.

@VituVingiSana..i forgot that I was writing in a country where we applaud those who buy Range Rovers from money made from selling maize meant to feed the poor ... or from money meant to educate children who would have otherwise grown up illiterate and where egalitarianism is greatly scorned at especially by the bourgeoisie.

What I was saying in very simple words was that the ownership structure and the business practices of some of the “blue-chips” in Kenya and in Africa at large are criminal at best – and aptly atrocious. Due to weak structures in many of our governments, these companies cannot be trusted to safeguard poor (retail) share holders interests. This explains why Safcom still pays pittances despite making grand profits. And also explains why the “Kenyans who used to own KBL” bailed out of the bandwagon. Cases of big company malpractice are not new (http://www.mobileeurope.co.uk/news_analysis/112397/Siemens_bribery_investigation_delays_Nokia_merger.html) or (http://www.xchangemag.com/hotnews/siemens-trial-nokia-management-bribes.html) just to quote. But, it calls from strong governments and vigilance from the knowledgeable populace to keep these things in check.
I will not delve on the EABL saga, what happened to SAB is still fresh in our minds. But even more clearly is its role in stifling the growth of local or truly indigenous industry.

@dukawalla - Please discuss facts not general statements. I gave u facts. And stick to Kenyan firms. I am NOT interested in Nokia or Siemens since they are not listed in Kenya.

I was one of the Kenyans who agreed with Diageo at the time & chose a Scrip Dividend & bought shares during the Rights. Diageo did all they could to encourage their (KBL/EABL) employees to buy EABL shares as well as the public.

Kenyans were in awe/fear of SAB. Many Kenyans had written off EABL. So why blame Diageo who saw opportunity? They were smart. Very smart.

I am ready to debate on facts not general bashing of 'foreign firms/shareholders'...

1) I ask for facts & suddenly you don't want to 'delve on the EABL saga'??? Please do...
2) Castle was controlled by SAB (S.African)so why is SAB a good guy while Diageo a bad guy?
3) What do you mean 'local or truly indigenous'?

@dukawalla.. seriously what the hell are you talking about????
finance 101: weak cash flow + high investment expenditure= low dividends no matter how large the profits are... and thats considering if you call a 45% dividend payout crap...
i think when you are having these discussions you should really put your personal feelings for foreigners aside and speak facts...
here we are selling the hell out of KQ and safcom then ten years from now the same ones crying our asses off when:
KQ PBT= 15BILLION
SAFCOM PBT=45 BILLION