Shocking: Illicit Alcohol Now Holds 60% of East African Market

East African Breweries Limited chief executive Jane Karuku has raised fresh concerns over the scale of illicit alcohol in the region. In an interview with The Trading Bell published February 6, 2026, she cited a recent EABL-commissioned study across Kenya, Uganda and Tanzania showing that illicit products account for 60% of all alcohol consumed.

The figure marks a reversal from earlier patterns. “A few years ago we were on the 50/50 or 40/60, where 40% was illicit and 60% formal,” Karuku said. “Today, we are accessing only 40% of the ecosystem, which for me is a worry.” The formal sector, including EABL's brands like Tusker, Guinness and Johnnie Walker, now captures just 40% of the total market.

Karuku linked the shift to broader threats. Consumers face direct health dangers from unregulated drinks that may contain toxic substances or improper alcohol content. “Our consumers are not getting safe brands or safe alcohol. So that's a health issue,” she noted. Governments lose substantial excise and VAT revenue from untaxed production and sales. The illicit trade also fractures integrated supply chains that support barley farmers, bottle suppliers, distributors, transporters and retail outlets in the formal sector.

EABL's operations rely on a compliant value chain where raw materials, production, logistics and sales generate taxes and jobs. Illicit operators bypass these steps, undercutting prices and eroding market share for legitimate players. Karuku described the trend as unsustainable. “The direction this is going is worrying. It is not sustainable, it is not tenable, and it is something we must address urgently for the health of consumers and the health of the economy.”

She called for stronger enforcement against illegal production and distribution. This includes tighter border controls, more raids on counterfeit operations and better tracking of excisable goods. Kenya has seen repeated crackdowns on chang'aa and other homemade brews, but enforcement often struggles with rural distillation sites and cross-border smuggling from neighbouring countries.

The warning comes as the alcohol industry navigates high excise duties, advertising restrictions and public health campaigns against excessive drinking. Formal producers argue that heavy taxation drives consumers toward cheaper illicit options, creating a vicious cycle. EABL has invested in local sourcing and modern facilities, but the CEO stressed that illicit dominance undermines those efforts and the wider economy.

For the construction sector, which supplies materials for breweries, warehouses, bars and retail fit-outs, the formal market's contraction limits growth in related infrastructure. Licensed outlets and production plants drive demand for specialised builds like cold storage, bottling lines and hospitality renovations, while illicit trade often operates from informal setups with minimal compliance.

The study reinforces long-standing industry concerns in East Africa, where illicit alcohol has historically been linked to poisoning outbreaks and revenue shortfalls. Karuku's comments add urgency to calls for coordinated regional action to protect consumers and restore balance to the market.