Brookside Dairies Ugandan subsidiary has filed a petition to the Ugandan Ministry of Trade, industry, and Cooperatives against the move of the Kenya Dairy Board to deny issuing permits for its dairy products in the country.
In a letter addressed to the Ugandan minister, the Kenyan government stopped issuing permits for Ugandan dairy products in their Kentrade system on 9th March 2023.
“Effective March 19, the Kenyan Government through the Kenya Dairy Board stopped issuing permits to our dairy products in their kentrade system, affecting our factory output significantly,” it stated.
“This is after a notice banning dairy imports issued by the same regulator (Kenya Diary Board) was rescinded by the principal secretary, State Department for Livestock Development, Ministry of Agriculture and Livestock Development.”
Although a notice banning dairy imports was rescinded by the Principal Secretary of the State Department for Livestock Development, Ministry of Agriculture and Livestock Development, the permits are still being denied by the Kenya Dairy Board.
This has resulted in a significant reduction in raw milk purchases, depressed raw milk prices for farmers, job losses, and other adverse long-term effects on the dairy sector.
Brookside revealed it has invested US$60.7 million in the dairy sector so far and was planning an additional investment of US$10.2 million to finance the refurbishment, upgrade, and expansion of its factory facilities in Kampala.
However, due to the uncertainties with the Kenyan regulator, the company is considering putting the planned investments on hold.
As a result, Brookside is seeking the urgent intervention of the Ugandan government to unlock the current blockade from the Kenyan government so that the normal flow of the region’s dairy trade can be restored.
According to the company’s general manager, Benson Mwangi, Uganda’s dairy industry has faced challenges following the non-tariff barriers imposed by the Kenyan regulator, the Kenya Dairy Board affecting its production outputs.
“We wish to bring to your attention a particular challenge we are currently facing through non-tariff barriers that have been imposed in Kenya by the Kenyan regulator, the Kenya Dairy Board,” he said in a statement.
He highlighted that the current situation is likely to have negative consequences not only for Brookside Dairy Company but also for the Ugandan dairy industry as a whole.
It is hoped that a resolution can be reached soon, allowing both countries to continue to benefit from the growth of the dairy sector, he added.
