Bloodbâth At Keroche As Company Lays Off 400 Workers

Keroche Breweries Limited has announced the retrenchment of over 400 workers following the closure of its Naivasha-based brewery over tax disputes with the Kenya Revenu Authority (KRA).

In a statement on Monday, Keroche founder and CEO Tabitha Karanja said that the company is also staring at a loss of over Ksh350 million worth of alcohol that is going to waste.

“I was thinking aloud on Sunday afternoon and pondering how I will relay the painful message to our employees on Monday that we will be laying them off as a result of KRA’s closure,” Ms Karanja wrote.

“I was also at pains as I looked at all the beer in the tanks that we shall be forced to drain to waste and wondered why and how the following relevant ministries remain so indifferent to the dire consequences of the current closure of the company’s factory.”

After a long-running, publicized saga, KRA and Keroche struck a deal in March 2022 that allowed the firm to resume operations. The deal announced by KRA was centred on a new payment plan that would see Keroche pay Ksh957 million over 24 months.

However, Ms Karanja now has refuted claims that the company is not tax compliant, attributing its woes to a dip in revenues due to Covid-19. According to Karanja, the company recorded revenues as high as Ksh500 million per month before Covid-19, which has now dropped to Ksh50 million due to Covid-19.

“We would like to clarify that the payment plan for tax in arrears signed between KRA and the company included an amount of Ksh500 million goodwill payment proposed by the company on historical hypothetical taxes. This was to facilitate conclusion of matters settled out of court and create a conducive working platform for the company. The company had however requested for a moratorium of 6 months before commencing payments because of post-Covid effects that were aggravated by several closures of the factory between Dec2021 to date and Agency Notices issued to Banks. The company still requests for moratorium in order to have a head start and for reorganisation of finances both internally and externally for operations and for tax payment going forward,” she said.

‘It is worth noting that Keroche Breweries earned monthly revenues of between Ksh400 million and 500 million pre-Covid-19. After the prolonged closure, the revenues dropped to below Ksh50 million.”

Karanja has now appealed to the relevant authorities to spare the company from permanent closure.

“It is my humble request that all the relevant authorities be requested to rise to the occasion in order to amicably resolve the current issue and further protect and create a conducive and enabling environment even for other industries that may be suffering in silence,” she added.

In March, Karanja had blamed regular disruptions by KRA for their inability to honor a previous payment plan. KRA has been demanding Ksh22 Billion in unpaid taxes in the protracted battle that has played out over a decade.

Karanja had also ruled out a potential stake sale by Keroche to help sort out the tax problems. She asserted that she wanted the 25-year old firm, Kenya’s second-largest alcohol manufacturer after Diageo-owned EABL, to survive the current challenges.

Read: Reopen Keroche – Raila Backs Tabitha Karanja in KRA Battle

>>> New Tax Rule Would Cost Keroche Ksh11 Billion