Kenya is facing a growing illicit trade in alcohol and cigarettes, with illegal products taking a significant share of the market and raising concerns over lost government revenue, unfair competition and public health risks.
A 2025 report by Euromonitor International, commissioned by the Alcoholic Beverages Association of Kenya (ABAK), estimated that illicit alcohol accounted for 60 per cent of alcohol consumed in the country, representing a 27 per cent increase since 2022.
The report attributed the rise to high taxes on legal alcohol, the availability of homemade brews, smuggling and counterfeit products.
The illicit trade is also costing the government billions of shillings in lost revenue. The report estimated that Kenya lost about Sh120 billion in 2024 through tax leakage, ethanol smuggling and counterfeit alcohol.
The problem extends beyond the domestic market. In August 2026, Rwanda temporarily suspended imports of 52 alcoholic beverage products from several countries, including five Kenyan brands, as it intensified safety and quality checks. Kenya Bureau of Standards (KEBS) later said the affected Kenyan brands had passed inspections and laboratory tests and continued to meet the required standards.
Authorities have also continued to uncover large-scale counterfeit alcohol operations.
In January 2026, the Anti-Counterfeit Authority (ACA) seized 1,525 cartons of suspected counterfeit Best Gin and Best Brandy in Eldoret, valued at about Sh7.6 million. Another operation in Nairobi’s Ngara area resulted in the seizure of 277 boxes of suspected counterfeit liquor worth approximately Sh1.4 million.
ACA officials have warned that counterfeit alcohol networks use fake labels and excise stamps, refill genuine bottles and reproduce packaging to make illegal products appear legitimate.
The health risks are particularly concerning. The World Health Organization warns that illegally produced alcohol can contain toxic substances such as methanol, which can cause severe poisoning, blindness and death.
The United Kingdom has also previously issued methanol-related travel guidance for Kenya, warning travellers against consuming street or homemade alcohol and advising them to purchase sealed drinks from licensed establishments.
Illicit cigarette trade
The illegal market is not limited to alcohol.
BAT Kenya reported that illicit cigarettes accounted for 45 per cent of the domestic cigarette market in 2025, up from 37 per cent in 2024. The company estimated that the trade costs the government about Sh12 billion in lost tax revenue annually.
The rise has been attributed partly to the price difference between legal and illicit products, with illegal traders avoiding taxes and other regulatory costs.
The World Health Organization says tobacco causes cancer, cardiovascular and respiratory diseases and premature death, regardless of whether the product is legally manufactured or sold.
Crackdown intensifies
Kenyan authorities have stepped up enforcement involving agencies including the ACA, NACADA, Kenya Revenue Authority and the National Police Service.
On August 21, NACADA reported seizing more than 27,000 litres of illicit alcohol during operations in Nairobi and Nyakach. Since December 2025, the agency says it has seized more than 2.8 million litres of illicit alcohol and arrested over 970 suspects.
Despite the seizures, the scale of the trade suggests that enforcement alone may not be enough to eliminate the market.
High taxation, consumer demand, smuggling networks and the availability of cheaper illegal products continue to create opportunities for illicit traders.
The growing figures point to a market that has moved beyond isolated counterfeit operations into a parallel economy—one that deprives the government of revenue, threatens legitimate businesses and exposes consumers to products whose origins and contents may be difficult to establish.
