77% of Seized Fake Alcohol Is Locally Manufactured - Anti-Counterfeit Authority

The Anti-Counterfeit Authority (ACA) has revealed that 77 per cent of seized illicit alcohol in Kenya is locally manufactured.

The disclosure was made on Thursday, September 10, by ACA CEO Robi King’a when he appeared before the Senate Standing Committee on Information, Communication and Technology to discuss the use of digital technologies and product traceability systems in combating counterfeit and illicit alcohol and protecting consumers.

The committee was told that the illicit alcohol problem extends beyond counterfeit products to include several forms of unlawful and unsafe alcohol.

"The Committee was informed that the challenge of illicit alcohol extends beyond counterfeit products to include tax-leaked, smuggled, substandard, adulterated, unlicensed artisanal and surrogate alcohol, requiring a coordinated multi-agency response," the ACA said.

The ACA noted that counterfeit alcohol represents only a narrower component of the wider illicit-alcohol problem. 

It may involve the unlawful use of protected brands, labels, caps, seals, bottles and other packaging, as well as the refilling of genuine branded bottles with illicit contents.

King’a told the committee that available seizure data showed that locally manufactured products accounted for the largest share of alcohol seized as illicit.

"He noted that ACA-cited seizure data indicated that 77 per cent of seized alcohol was locally manufactured, 15 per cent imported and eight per cent of unknown origin, although the Authority cautioned that the figures should not be treated as a nationally representative market share without the underlying methodology and cut-off date," the authority added.

The committee further heard that counterfeiters were increasingly using sophisticated methods to defeat authentication systems, including cloning genuine QR codes, reusing genuine bottles and labels, substituting contents, manipulating digital accounts, replaying valid serial numbers and marketing illicit products through social media and closed messaging platforms.

The ACA proposed a combination of secure identifiers, tamper-evident packaging, scan analytics, batch validation, anomaly detection, cybersecurity measures, physical inspections and laboratory testing to counter the emerging threats.

The authority cautioned that a QR code alone could not guarantee the authenticity or safety of an alcoholic product and called for a broader multi-agency approach supported by legislation and interoperable technology.

"The Authority recommended that the Senate support a legislative and interoperable national authentication framework covering both imported and locally manufactured high-risk alcoholic products, while ensuring that the digital framework forms part of a broader multi-agency strategy to address illicit alcohol," the ACA stated.

At the same time, the meeting examined the Anti-Counterfeit Integrated Management System (AIMS), ACA’s digital platform that supports intellectual-property recordation, import-related declarations and internal regulatory functions.

However, the authority said the current system has gaps in capturing various aspects of the domestic alcohol industry and does not independently verify several regulatory requirements.

"The existing system does not comprehensively capture locally manufactured finished alcohol, local bottling, contract manufacturing, refilling, packaging suppliers and domestic distribution. 

"AIMS also does not independently verify excise payment, chemical safety, standards compliance, premises licensing or lawful ethanol use," the ACA further said.

To strengthen traceability, the ACA proposed a phased rollout of an anti-counterfeit security device targeting high-risk products, including alcoholic beverages. 

Each product would be assigned a unique identifier linked to a secure record controlled by the authority.

According to the ACA, the proposed technology would allow consumers and enforcement agencies to establish whether products are genuine while providing authorities with data that could help identify suspicious activities.

"The system would enable consumers and enforcement agencies to verify the authenticity of products while generating data that could support detection of suspicious activity," the authority noted.

The ACA stressed that its proposed security device should complement existing regulatory systems rather than duplicate the functions of agencies such as the Kenya Revenue Authority (KRA) and Kenya Bureau of Standards (KEBS).

The authority proposed an interoperable model under which each agency would retain its statutory responsibilities while sharing relevant information through the national authentication framework.

"Under the proposed interoperable model, ACA would verify product and brand authenticity, KRA would confirm excise status, KEBS would verify standards and certification status, while county governments would provide licensing information," the ACA noted.

The ACA told the committee that legislative amendments would be required to extend the existing security-device framework to prescribed locally manufactured goods.

The proposed changes would also establish a formal registration framework for local manufacturers and other businesses involved in the production and packaging of high-risk products.

"The proposed amendments would also provide for registration of local manufacturers, authorised bottlers and contract manufacturers, while establishing safeguards against cloning, tampering and unauthorised reuse of security devices," the authority said.