Kampala — At least 19 trucks carrying powered and UHT milk have been returned to Uganda or diverted by Kenyan authorities, according to details obtained from Uganda Revenue Authority.
The milk truck loads worth more than Shs1.1b, URA details show, have been directed to return on varying dates or diverted with their goods that are later seized by Kenyan authorities.
This, together with the sealing off of the Pearl Dairies depot in Kisumu, western Kenya is expected to spark a trade war with far-reaching implication. Uganda has already demanded that Kenya stops hostilities on its exports or face reciprocal measures.
According to a URA internal memo seen by Daily Monitor, Uganda is already targeting a number of goods, key among them juices, assorted household items and roofing materials.
URA sources that requested anonymity, said that whereas Uganda's goods, specifically milk is cleared by Kenya Revenue Authority, Kenya Bureau of Standards and Kenya Plant Health Inspectorate Service, they are seized by the Kenyan inland police.
"Police is removing milk from the market and stopping new supplies. No one is providing an explanation," the source said.
Mr Dicksons Kateshumbwa, the URA commissioner for customs, told Daily Monitor in an interview that whereas he has been able to engage his counterpart in Kenya Kevin Safari, he has been informed "the matter is beyond customs."
Daily Monitor on Monday published a story in which Mr Bijoy Varghese, the Pearl Dairy general manager, which produces Lato Milk, said that Kenya authorities were not providing sufficient explanation on why they were seizing Lato Milk products.
"You see the Kenya authorities have continued to do what they were doing [seizures].
Unfortunately, we don't know why this is happening," he said.
In the same measure, he confirmed that their depot in Kisumu had been sealed off and nobody had been allowed to access the premises.
Yesterday, Mr Emmanuel Mutahunga, the Trade Ministry commissioner for external trade, said that the Kenyan authorities had informed authorities in Uganda that they were going to send back the milk.
However, he noted that the matter had reached the political level where it will be handled diplomatically.
The war against Lato Milk exports started at the close of last year. At least milk exports worth $270,000 (Shs1 billion) have been lost only a daily basis.
Yesterday, Mr Gideon Badagawa, the Private Sector Foundation Uganda executive director, said that whereas he was not aware of the milk diversions, there was a breakdown in communication between the Uganda and Kenyan authorities.
"We see a breakdown in the communication to the relevant technical authorities and this could be the reason why all this is happening," he said, expressing disappointment on how Kenya has treated Uganda yet it is one of the country's largest trade partner.
Retaliation will be bad for East African Community
Uganda may be tempted to retaliate on a number of Kenyan goods, experts have expressed concern on the damage that the retaliation on the East African Community. The EAC treaty bars any form of non-tariff barriers by member states in order to ease trade.
"We are seeing an increase in NTBs [non-tariff barriers] among the member states this is not good for trade and the region," Mr Badagawa says. The way forward right now, he says, is for member states to go back to Arusha, Tanzania and look at the issue of the sovereignty where it was agreed to open markets. Uganda has put a number of options on table among them retaliating on a number of Kenyan goods that are manufactured here. URA is already targeting a number of goods, key among them juices, assorted household items and roofing materials.