20 June 2014

Kenya: Strict Law Enforcement Key to Ending Counterfeit Scourge in Kenya

Nairobi — The proliferation of counterfeit products in Kenya -- from consumer electronics to pharmaceuticals and fertilisers -- is slowing economic growth and putting the lives of many people at risk, industry insiders have warned.

The rise in counterfeit goods can be attributed to weak law enforcement throughout the region and the failure by Kenyan authorities to fully enforce its own anti-counterfeit laws, Kenya Association of Manufacturers Chairman Polycarp Igathe told Sabahi.

Due to counterfeit trade in Kenya, it is estimated that businesses lose over 50 billion shillings ($572 million) annually, and the government loses out on 19 billion shillings ($218 million) in tax revenues, according to Igathe.

This illicit trade is "denying legitimate businesses a market for their goods and driving them out of operation," he said. "This has a negative impact on the national economic growth."

Igathe added that some counterfeit products are even outperforming brand names.

"To protect our brands, most companies are spending a lot of resources on combating this menace, which has led to reduced revenues and slowed growth," he said.

For any progress to be made in fighting counterfeit products, he said, all countries in East Africa must pass stringent laws and enhance surveillance to deter the trade.

Surge in complaints:

John Akoten, acting executive director at Kenya's Anti-Counterfeit Agency (ACA), acknowledged that the country is experiencing an influx of counterfeit products in the market, especially electronics such as phones, television sets and phone batteries.

Since 2010, there has been a gradual increase in counterfeit products, he said, and between 2012 and 2013, there were 301 official complaints filed -- double the number of complaints in the previous two years combined.

"We are also seeing an upsurge in the counterfeiting of medicinal drugs, pesticides, and both soft and alcoholic drinks," he told Sabahi.

Akoten said his agency was committed to stamping out counterfeit goods in Kenya and reversing the trend.

Although Kenya has an adequate legal framework to combat counterfeiting, the country is experiencing an uptick due to poor law enforcement, said Kenya Consumer Protection Advisory Chairman Stephen Mutoro.

"This is due to failure by institutions to robustly implement the measures in place to curtail this trade," he told Sabahi, adding that another major hindrance is the lack of co-ordination among the various agencies involved.

The Kenya Bureau of Standards (KEBS), the Pharmacy and Poisons Board (PPB), the Kenya Copyright Board (KCB) and the ACA are the government agencies working to maintain product standards and prevent the proliferation of counterfeit goods.

"What we need to see are more harmonised and well-co-ordinated operations ... to help the country get rid of counterfeits," Mutoro said.

He said the increase in use of counterfeit fertilisers and pesticides was particularly worrisome, as it could lead to environmental degradation and compromise the food supply.

To help convince customers to buy genuine brands, Muturo called on manufacturers to lower their prices.

"Most of the citizens opt for fake brands because they are in most cases cheaper than the genuine one," he said. "So... by lowering prices of genuine products, legitimate manufacturers will be driving fake merchandise out of businesses."

He also called government agencies and the manufacturers to carry out awareness campaigns to educate the public on how to identify counterfeit goods and better understand the risks associated with their use.

However, on the price reduction argument, Igathe of the Kenya Association of Manufacturers said it was not tenable for manufacturers of genuine products to lower their prices to match the cost of counterfeit goods because, among many reasons, counterfeits are not subject to taxes.

Crackdown on counterfeit drugs:

Ahmed Mohammed, director of the PPB's Inspectorate, Surveillance and Enforcement Division, said that proliferation of counterfeit drugs and other pharmaceutical products in the Kenyan market was alarming.

"These uncertified drugs pose a serious health risk to our population [in addition to] having a direct negative impact on the national economy," he told Sabahi. "However, we have intensified the crackdown on outlets selling these drugs and we have sought Interpol's help in trying to stem the menace by increasing surveillance so that the [drugs] do not enter the Kenyan market."

Mohammed said that since April, the PPB has been investing in technology used at the port of Mombasa to screen all pharmaceutical products imported into the country.

"With scaled up surveillance and crackdowns we have managed to close down over 30 premises and arrested over 926 proprietors dealing in counterfeits drugs this month alone," he said. "But I am sure with a more concerted effort we will be able to stamp out this menace."

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