Keroche Fights to Survive as KRA Comes Knocking

Keroche Breweries, the country’s second largest alcohol manufacturer by market share, is reportedly in a financial crisis.

It was temporarily shut down by the Kenya Revenue Authority (KRA) in December 2021 but the matter was resolved before the new year. The company defaulted on payments agreed upon in a court-sanctioned deal with KRA.

KRA officials again stormed their premises in January over the defaults. The firm was in 2020 ordered to pay Ksh9.1 billion to the Kenya Revenue Authority after losing a case against the taxman.

KRA won six appeals filed by Keroche before the Tax Appeals Tribunal in 2015 and 2017. Keroche eventually opted to enter Alternative Dispute Resolution (ADR) with KRA.

The company also owes employees up to two months in salary arrears. CEO Tabitha Karanja attributed the arrears to cash-flow challenges due to the shocks of Covid-19 but promised that the team was working resolve the issue.

Karanja in the second half of 2021 announced her bid to become Senator of Nakuru County. She has fashioned her campaign along representing investors’ and manufacturers’ interests in the county and Kenya in general.

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“To be candid, the ripple effect of the disease greatly affected our tax obligation and this resulted in arrears amounting to Sh270 million.”

“Before Covid-19 hit us hard, we were able to pay the Sh200 million (tax) comfortably but we had a slight delay in settling the outstanding amount,” she told Business Daily.

Karanja, however, noted that they had reached an agreement with KRA and looked forward to being in a more stable position.

“We are hoping to continue honouring our tax obligations going forward as things are now looking up.”

“We have weathered the storm and with the goodwill from the KRA, we shall continue to pay our taxes,” she stated.

The firm in 2021 introduced new products to its range as it looked to gobble up market share. Brands introduced were Vienna Strong Lager, a 10% alcohol brand and X beer eyeing the high-end market.

The markets it was targeting are currently dominated by imported alcohol brands.

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