The fate of the Kenyatta-family owned milk processing firm Brookeside Ltd in the Tanzanian market has been sealed.
Newly-elected Tanzanian President John Magufuli has accused the company associated with his Kenyan counterpart of ‘unfriendly’ business practices. While addressing Tanzania Private Sector Foundation on Thursday, he said it was not fair for Brookside Dairy Limited to collect milk from Tanzania, process it in Kenya and then sell back to them.
“How many dairy firms do we have that are operational? Do you remember the Brookside company in Arusha? It used to collect milk from the Maasais in northern parts of Tanzania, take it to Kenya for processing then bring it back to us to drink… Enough is enough,” he told the business people.
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The statement dimmed hopes of the Kenyatta family business’ plans to re-enter the market after forced exit in 2009. Tanzania banned Brookside’s milk collection and directed that all milk produced must be processed locally.
Mr John Gethi, the general manager of milk procurement and extension services, had disclosed that the company has plans to resume the collection in order to supplement to erratic supply from Kenya.
Brookside, the largest dairy processing company in East Africa, is co-owned by the Kenyatta family and a French company – Danone. The Kenyatta’s sold 40% of their shares to the French in 2014 at an undisclosed amount.
The processor, through its Brookside Dairy Tanzania Ltd, had acquired Tanzania Dairies’ Arusha plant in 2004 with the promise of turning it into a state-of-the art milk processing unit but later changed its strategy citing low milk supply.
Government officials were angered with the continued export of the milk to Brookside’s Ruiru-based plant saying the business model denied locals employment hence the ban.
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