A recent report by the Anti-Counterfeit Authority (ACA) reveals a concerning trend: 60% of all alcohol sold in Kenya is illicit. This includes counterfeit spirits, smuggled products, and unregulated homemade brews, many of which are indistinguishable from genuine brands on retail shelves.

While this issue is often viewed primarily through a public health lens, it also has serious intellectual property (IP) and commercial implications. It affects brand owners, investors, law-abiding businesses, and the broader formal economy.

Illicit alcoholic products often:

• Use recycled branded bottles and forged excise stamps;
• Imitate trade marks, trade dress, and packaging of well- established local and global brands; and
• Circulate through informal and unlicensed supply chains that evade regulatory monitoring.

This constitutes trade mark infringement and passing off. Beyond visual similarities, consumers are deceived into thinking they are purchasing legitimate products, exposing them to dangerous substances like methanol.

The economic impact of illicit trade in alcohol is significant:

• Ksh.120 billion in tax revenue lost in 2024 alone;
• Devaluation of brand equity for trade mark owners, including multinationals and local producers;
• Investor hesitation, particularly in the manufacturing and distribution of regulated alcoholic beverages; and
• A thriving black market economy, undermining licensed businesses and compliant traders.

Kenya has made important strides in strengthening its IP landscape. Agencies like ACA, the Kenya Revenue Authority (KRA), and the Kenya Bureau of Standards (KEBS) continue to play a central role in addressing this challenge:

• The Excise Goods Management System (EGMS) enables serialization and digital verification of excise stamps.
• Consumer-facing tools, like the KEBS App, empower buyers to verify product authenticity.
• Multi-agency task forces coordinate inspections, seizures, and awareness campaigns across Kenya.
• New packaging standards and guidelines help reduce avenues for abuse, such as through bottle reuse or sachet sales.

These systems are already reducing vulnerabilities across the supply chain and building a stronger regulatory framework.

To mitigate the IP and commercial risks associated with illicit alcohol, a few strategic actions can be considered by IPR holders, including:

1. Register Trade Marks and Designs:
   Ensure all key brand elements; names, logos, bottle shapes, labels are registered with Kenya Industrial Property Institute (KIPI) or internationally where relevant.
2. Monitor the Market:
   Regularly audit the market for lookalike products or infringements, especially in high-risk areas like Nairobi, Mombasa, Kisumu, and Eldoret.
3. Work with Enforcement Agencies:
   Collaborate with ACA, KEBS, and KRA to report counterfeits and support investigations through legal representation or technical input.
4. Leverage Packaging Security:
   Consider adopting additional features like tamper-evident seals, QR authentication, or serialized labelling to reinforce brand integrity.
5. Strategic Litigation and Public Awareness:
   Pursue legal action where appropriate to set precedent and deter repeat offenders. Educate consumers on identifying genuine products.

Protecting trade marks in the alcoholic beverages sector is not only about brand identity but it is also about consumer safety, economic integrity, and investment confidence.

For more information on IP registration, enforcement, or brand monitoring, please contact us at info@cfllegal.com