By Meshack Osano
‘What a man can do a woman can do better’ is what best defines Tabitha Karanja, the founder and Chief Executive Officer of Keroche breweries Limited. She has been at the helm of the first fully locally owned and second largest brewery in Kenya from 1997. By the time of posting this article, the entrepreneur has steered the giant brewery for the past 24 plus years.
Her resilience-if not dynamism-and business acumen has set her apart from her peers.
Tabitha Karanja was born on 26th August 1964 near Kijabe. She is married to Joseph Karanja and is a mother to four namely: James Karanja, Anerlisa Muigai, Edward Muigai and the late Tecra muigai.
After completing a degree in Business Administration from the University of Nairobi, she worked in the Ministry of Tourism as an Accounting clerk for close to 2 years.
How she started
She met her husband Joseph Karanja who worked in a hardware in Naivasha. The couple closed down their business to venture in the less trodden path of wine making in 1997.
They started with the new brand vienna with an initial production of 200 litres. As demand for their product gained a footing, Tabitha and her husband introduced four additional drinks.
In 2007, the government increased taxes on local wines which affected her business causing her products to be priced out of the local market .
The dynamic duo started making gin and vodka under her new found Keroche Industries. In 2008, she added beer with the brand name”summit”. She later expanded to 600,000 bottles a day down from 60,000 bottles in 2013 .Keroche industries was renamed to Keroche Breweries by her in 2015 opening a 5.5 billion refurbished plant. This increased production from 10 million litres to 110 million litres. The brand was commissioned by Adan Mohammed ,the then Cabinet secretary for industrialisation on 31st march 2015.
In 2010 , the then president mwai Kibaki honoured her with a Moran of order of the burning spear for her efforts in liberalizing the liquor market.
She also got honoured with an AABLA award and her brand gained international and continental recognition and acceptance Keroche breweries currently makes 20 percent of Kenya’s beer.
3 months after Adan mohammed commissioned her refurbished plant, the area MP John Kihagi backed by a mob threatened to break into her plant and inspect her firm. He claimed he was looking for unspecified 2nd generation brews.
She was also accused of tax evasion by Kenya Revenue authority of up to $140 million and on Wednesday t
hat week, Kenya director of public prosecution Noordin Haji handed her an arrest warrant .
She cried foul and refuted the KRA claims, citing unfair competition that competitors intended to tarnish her brand, but was still arrested on Thursday afternoon after an 18 hours standoff in Keroche Industries headquarters at Naivasha.
KRA finally carried the day when the courts ruled in their favor. A statement dated 11/03/2020 from KRA read:
The KRA is set to collect tax of Kshs 9,116,835,985 .00 from Keroche Breweries Limited with regard to products manufactured and marketed by Keroche breweries Limited. This follows a big win by the Kenya Revenue Authority in the six (6) Appeals filed by Keroche before the Tax Appeals Tribunal in 2015 and 2017 respectively.
In three of the Appeals, the contention was the manufacturing process of Vienna Ice Brand of Vodka. The brewer argued that, Vienna Ice brand of Vodka was not a distinct product from Crescent Vodka since Vienna Vodka was produced by diluting Crescent Vodka which process did not amount to manufacture.
KRA relied on the Compounding of Denatured Spirits Act Cap 123 and argued that the process undertaken by Keroche Breweries was compounding within the meaning of the Act. Compounding of spirits also amounted to manufacture of new product within the definition of Customs & Excise Act, CAP 472 (now repealed).
In the other three appeals, the contention was with regard to classification of pineapple based wines. The Brewer had argued that what they produced was fortified wines which should be classified under HS Code 22.04 which attracted lower excise duty rate of 40%. Their position was that the classification was specific for any fortified wine.
KRA’s position was that HS code 22.04 was reserved for wines based on grapes and the Keroche’s fortified wine was purely fermented pineapple as such is to be classified under HS Code 22.06 which is for any other fermented beverage. HS code 22.06 attracted a higher excise duty rate of 60%.
The Tax Appeals Tribunal in its’ judgments delivered on 9th March, 2020 held that:
Keroche Breweries Limited was involved in the compounding of spirit which amounts to manufacture within the meaning in Excise Duty Act, 2015 and Customs and Excise Act, CAP 472 (repealed)as such Vienna Ice was a distinct product for which Excise Duty was payable;
With regard to Fortified wines produced by the Brewer, the Tribunal guided by the World Customs Organization explanatory notes on HS code found that HS code 22.04 was for grape based wines and the correct classification was HS code 22.06 as the Keroche’s wine is a mixture of fermented pineapple and alcohol.
The Tribunal however faulted the Authority for levying interest and late payment penalties for the period the disputes were being litigated at the High Court and the Court of Appeal which had directed that the matters be heard at the Tax Appeals Tribunal.
Death Of Her Daughter Tecra
Tabitha lost her daughter Tecra Muigai on May 2 after falling from a staircase at a house she shared with her boyfriend in Lamu on April 27. She shared the apartment with her 54-year-old boyfriend Omar Lali. At the time of her death, Tecra was 29, a few days shy of her 30th birthday. She was buried in Naivasha in a private funeral ceremony.
Tabitha karanja estimated networth of kes5.5 billion.