Keroche Breweries, Kenya’s second-largest brewer is in a financial crisis, having failed to honour its salary obligations for two months.
According to media reports, the brewer owned by businesswoman Tabitha Karanja is also unable to pay its taxes.
In December, the Naivasha-based brewer was shut down by the Kenya Revenue Authority (KRA), but the issue was resolved quietly during the festivities.
The company has been involved in a Ksh9.1 billion tax dispute with the taxman, which resulted in a court battle that ended last year after Keroche chose an alternative dispute resolution. KRA won six appeals filed by Keroche before the Tax Appeals Tribunal in 2015 and 2017.
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However, following the onset of Covid-19 pandemic, Keroche experienced cashflow difficulties, forcing it to lose track in honouring its part of the bargain.
“To be candid, the ripple effect of the disease greatly affected our tax obligation and this resulted in arrears amounting to Ksh270 million. Before Covid-19 hit us hard, we were able to pay the Ksh200 million (tax) comfortably but we had a slight delay in settling the outstanding amount,” said Keroche CEO Tabitha Karanja.
“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.”
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At the height of Covid-19, Keroche was forced to scale down operations, sending home hundreds of non-essential workers in a bid to cut operational costs.
Currently, the brewer is eying 20 percent of the market share with over 30 brands of alcohol in the market.
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.
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