RETRAK urges crackdown on illicit trade networks, calls for tougher enforcement

NAIROBI, Kenya Nov 11 – The Retail Trade Association of Kenya (RETRAK) is calling for coordinated action to dismantle the supply networks behind smuggled, counterfeit and untaxed goods, warning that targeting retailers alone will do little to stop the growing illicit trade.

The association wants the Kenya Revenue Authority (KRA), Anti-Counterfeit Authority (ACA), Kenya Bureau of Standards (KEBS) and National Police Service to adopt a joint enforcement plan, designate a lead agency and publish clear timelines for reporting progress.

RETRAK Chief Executive Officer Wambui Mbarire said enforcement agencies must look beyond seizures at retail outlets and pursue the suppliers, transporters, financiers and storage facilities involved in distributing illicit products.

“Seizing illicit products from a shop is only the beginning. Investigators must establish who supplied the goods, where they were stored, who transported them and who financed the consignment. Following that trail is how we disrupt the networks and prevent the next delivery,” Mbarire said.

The association cited figures showing the scale of illicit trade and its impact on government revenue, legitimate businesses and consumers.

A recent Kantar study estimates that illicit cigarettes accounted for 45.1 per cent of Kenya’s cigarette market in 2025, up from 34.1 per cent in 2021. The trade is estimated to have cost the government KSh10.2 billion in excise duty and VAT in 2025, and KSh47 billion between 2021 and 2025.

Figures presented to Parliament by the ACA indicate that illicit alcohol accounts for approximately 59 per cent of alcohol consumed in Kenya by volume, with an estimated economic cost of KSh71 billion in 2022.

The ACA’s latest firm-level survey also found that counterfeit goods represented an average of 18 per cent of products in the sectors surveyed, including 21 per cent of motor vehicle spare parts and 19 per cent of alcoholic drinks.

Recent enforcement operations further highlight the challenge. The ACA seized counterfeit goods valued at more than KSh563 million in the first three quarters of the 2025/26 financial year, while KRA destroyed fake and illicit goods worth KSh218 million in July. KRA also recently intercepted nearly 100 tonnes of smuggled sugar in Lodwar and Marsabit.

RETRAK is urging regulators to introduce practical tools that would allow retailers to verify excise stamps and product authentication marks. It also wants clear guidance for businesses dealing with suspicious deliveries, as well as safe and accessible channels for shop workers and members of the public to report suspected illicit goods.

Mbarire said legitimate retailers were being undermined by operators dealing in smuggled and counterfeit products while evading taxes and regulatory requirements.

“Retailers who meet licensing requirements, keep proper records and source goods legitimately cannot compete fairly against operators supplied by smugglers, counterfeiters and tax evaders. Illicit trade undermines compliant businesses, puts jobs at risk and exposes consumers to dangerous products,” she said.

The association is also calling for greater public accountability, including regular updates on investigations, the tracing of major suppliers, prosecutions and the recovery of unpaid taxes.

“We need an accountable, sustained response, not isolated raids. Kenyans deserve to know whether investigations are reaching the sources of illicit products and whether offenders are being brought to justice,” Mbarire added.

RETRAK said retailers also had a responsibility to conduct due diligence on suppliers, retain purchase records and reject products whose origins could not be verified. It pledged to work with regulators and enforcement agencies to develop guidance and awareness programmes for businesses of all sizes, including small traders.

Mbarire warned that the consequences of illicit trade went beyond lost government revenue and unfair competition, pointing to the risks posed by counterfeit alcohol and substandard vehicle parts.

“This is more than lost revenue or unfair competition. Counterfeit alcohol can threaten lives, and fake vehicle parts can cause serious harm. Tackling illicit trade protects consumers, legitimate businesses, jobs and public finances,” she said.