Alarm as fake goods flood local markets

A police officer displays jerry cans of fake herbicides found in a house in Flamingo estate in Nakuru after authorities smashed a racket on counterfeit medicine.

Kenyans are spending as much as Sh4 billion a year on cheap or fake products that have flooded the country, it can be revealed.

A police officer displays jerry cans of fake herbicides found in a house in Flamingo estate in Nakuru after authorities smashed a racket on counterfeit medicine. Photo/FILE

Kenya Bureau of Standards (Kebs), the regulatory body that ensures quality of products says the situation has been aggravated by the current economic hardship.

“The industry is big, worth more than Sh4 billion,” says Mr Kioko Mang’eli, Kebs chief executive officer.

Kebs is now warning that many lives may have been lost or are at risk, following the increased use of fake products.

“There hasn’t been a study to link fake and poor quality products to injuries or human deaths,” says an official of the Pharmacy and Poisons Board.

“You can be sure that the cheap imports are dangerous. It is just that medics don’t link the deaths or injuries to poisoning,” he added.

Counterfeit batteries, electronics, medicines, clothes and foodstuffs that have flooded the market are danger passing for genuine goods.

Some — including pens and batteries — are produced abroad, but carry “made in Kenya” stickers and fake Kebs quality mark seals to hoodwink the gullible buyer.

The Government has warned that one in every five of anti-malaria drugs available could be harmful.

Some over-the-counter drugs are chalk packaged as drugs manufactured by reputable firms — even expired drugs are repackaged with new  sell-by dates.

Other goods, such as batteries, are of low quality. And because they are also poorly packaged, if not handled well, could explode and harm humans and the environment, warns Mr Steve Smith, the chief executive of Kenya’s leading battery manufacturer, Eveready.

“The goods could expose one to danger, long term harm. The long-term implications outweigh short-term benefits,” he says.

Of concern also is an expanding counterfeit industry in Nairobi’s Kariobangi estate, which churns out fake detergents, cooking oil, maize flour and alcoholic drinks.

But the problem is bigger. The counterfeit goods are sold in neighbouring countries, and this imperils Kenya’s exports.

“I was in Ethiopia last week where we prosecuted four traders found dealing in counterfeit Bic Cristal biros,” says Mr Anthony Mburu, the Haco Industries’ director of export sales.

The economy is hurt too. Importers have evaded paying the 35 per cent duty imposed on local manufacturers. Consequently, traders of the substandard goods enjoy a 35 per cent leverage over local producers, and this has a significant implication on the ultimate price.

The importation of the fakes and poor quality products is possible because Kenya lacks stringent laws against the offence.

Corruption at points of entry such as the Mombasa port and borders, only compounds the problem, leading to  a market flooded with  cheap goods.

Our investigations reveal that syndicates involving Kenyan traders and foreigners are imitating reputable Kenyan brands and flooding them on the market.

The  imitation of Bic Cristal biro costs Haco Industry Sh100 million every year, says the company’s chief executive officer, Mr Polycarp Igathe.

Eveready is also losing a substantial amount of revenue to the cheats.

“The country is losing taxes, companies find it difficult to pay better salaries because of the counterfeits and sub-standard goods,” says Mr Smith.

In a number of cases, the imitation is so subtle that it is difficult, even to the rightful owner of the brand, to discern the difference.

“At a casual glance, the pen will pass for the real product we manufacture. It is when you start using it that you realise it is fake,” says Mr Igathe.

Counterfeiting is a global phenomenon, but it is rampant in Asia. According to conservative estimates, the industry is worth $200 billion (Sh13 trillion) worldwide.

Research to establish the magnitude of the problem in Kenya is being conducted. Both Kenya Association of Manufacturers and Kenya Revenue Authority say that they have commissioned separate studies to quantify the counterfeit economy.

To curb the deceit, Kebs has directed all manufacturers and importers of goods destined for Kenya’s market to carry on their products’ wrappers quality standard seals that indicate that they have been tested and their quality certified.

This regulation comes into force on July 2, and Mr Mang’eli says he will not reconsider the deadline.

“We have given them enough time to comply.” Industrialists agree that Kebs approach is a good step in the war against counterfeits and poor quality goods, although they feel the key answer lies in new laws and their enforcement.

The Anti-Counterfeit Bill lapsed with the last Parliament, but it has been republished for tabling in Parliament soon. The proposed law, together with the Consumer Protection Bill being drafted, will open a new frontier in the war against counterfeits, now likened to drug trafficking.

If implemented, the laws will jail those who manufacture and deal in fakes. On the other hand, consumers will have the opportunity to sue manufacturers of substandard and harmful goods.

Inferior goods

Kenya Association of Manufacturers, whose members have been hit hard by the fake and inferior goods, has set up an “anti-counterfeits committee” to lobby for the enactment of stringent legislation against fake and inferior goods that have flooded the market, says Mr Wycliffe Swanya, a consultant on intellectual property right and counterfeit.

“The committee is also looking beyond Kenya to ensure that counterfeit and poor imports are dealt with accordingly, across borders,” he says.

Kenya National Chamber of Commerce and Industry says the importation of counterfeits and substandard goods “is an issue of concern”.

The hullabaloo

“There is so much importation of substandard goods from China,” says the organisation’s trade officer, Mr Ageyo Ogembi.

But Chinese officials in Kenya said they didn’t understand the hullabaloo over counterfeits. “Is there legislation and certification to bar the importation of substandard goods?” asked an official in the commercial section of the Embassy. “Then how are the goods imported into the country?”

“Maybe the problem is with your policies and customs department. They are allowing bad goods to get into the country. This is not our problem. It is your responsibility to ensure that you allow only certified goods,” she said.