Counterfeit goods are costing manufacturers 40 percent of their market share, negatively affecting their ability to scale and better contribute to reducing unemployment in Kenya.
In Kenya, all fast moving consumer products face counterfeit threat. Such include motor vehicle spare parts, soaps, cooking oil, shoe polish, ball pens, tires, beauty products and soft drinks among others.
As a result, an approximate sh30 billion (US$ 42 million) is lost by Kenyan manufacturers per year, while the Government loses Kshs 6 billion (US$80million) annually as potential tax revenue, according to Phyllis Wakiaga, the CEO of Kenya Association of Manufacturers (KAM).
counterfeits also erode brand reputation in as much as they eat into their market share. It discourages continuous innovation into new product lines as innovators are anxious that their products will soon be counterfeited before reaching the targeted markets.
This overburdens the genuine manufacturers as they have to allocate resources to effectively monitor the markets to protect their products from being counterfeited; meanwhile these resources would be more profitable if channeled toward expansion and diversification of businesses.
In an effort to combat this, in 2014, the National Council for the Administration of Justice (NCAJ) was tasked to work hand in hand with KAM in order to develop an enforcement manual to deal with the vice. By the end of 2014, this committee (NCAJ and KAM) had come up with a well constituted point of reference now known as the Enforcement Manual to Combat Illicit Trade in Kenya (and popularly known as Illicit trade manual). About 2000 copies of the manual have so far been printed and widely distributed to various key stakeholders within and without Kenya.
In 2015, the Hon. Chief Justice, Dr. Willy Mutunga launched the manual at an event at the Malaba border town on March 25th, 2015. This launch was symbolic as Malaba town is one of the major entry/ exit points and as such would be instrumental in curbing illicit trade at our Kenya/ Uganda border.
Mrs. Wakiaga however feels that more still needs to be done
There must be a huge commitment on the part of government in the fight against counterfeits. Mandated agencies should have increased capacity adequately deal with counterfeiters and illegal traders continually use sophisticated mechanisms to thrive. There ought to be enhanced inter-agency collaboration and coordination in fighting counterfeits in Kenya especially on proper border controls and market surveillance/ sharing of intelligence information.
She also challenges consumers to be proactive in reporting counterfeit cases to both the industry and authorities in order to address the demand for counterfeit products challenge by innocent consumers.
KAM is taking lead in ensuring that its members do not continue suffering. The organization conducted a series of high-level awareness trainings from mid-2015. These were targeted at enforcement officers across the entire judicial chain. The training was undertaken in 6 major regions with about 400 high ranking enforcement officers attending and qualifying as champions against illicit trade.
The regions are; Coast region, North Eastern/ Upper Eastern region, Vast Rift Valley region, Lower Eastern region, Nyanza/Western region and Nairobi/ Central Kenya region.
This year, KAM wants to catalyze the implementation of the manual through more sensitization workshops to enforcement officers and trainings for its members.