Peter Ndegwa: The Brains Behind Senator Keg, Now At The Helm Of Safaricom

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Senator Keg is the most affordable lager in Kenya. It is a product of East Africa Breweries Limited (EABL) and its inception into the market was meant to target low income earners. It is true that the so-called ‘hustlers’ love and cherish this brand marketed as ‘bia safi, bei safi.’ In fact, the thought of drowning a handful of roasted peanuts with a jug of Senator is what keeps its fanatics looking forward to  Friday evenings.

According to various posters that market the drink, it currently retails at ksh 60 – 65 for 500ml. This is way cheaper compared to other bottled brands.

Fighting Kumi Kumi 

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Senator keg was introduced into the Kenyan market in November, 2004. The idea was to give low income earners an alternative to illicit brews which had claimed dozens of lives and left others permanently blind. In 2000, at least 140 people died after consumption of toxic ‘kumi kumi’ liquor in Mukuru Kayaba slums.

To ensure that Senator would take the market by a storm, officials of EABL strategised on production of a beer brand that would be a substitute for locally brewed alcohol. Current Safaricom CEO, Peter Ndegwa was the strategy director of EABL by then.

Ndegwa holds a Bachelors of Economics degree from University of Nairobi and a Masters in Business Administration from the London School of Business. He spearheaded the idea of Senator by use of several key strategies. The first was to ensure that the drink was going to be made using locally sourced raw materials such as sorghum. This would in turn lower the production costs unlike the use of difficult to source and expensive hops.

Secondly, the biggest breakthrough for Senator was negotiations for excise tax remissions. In 2004, the drink enjoyed a 30% tax remission which would shoot to 100% in 2006.

We decided to go to government and say our intention is to solve the illicit alcohol issue. So there is a social angle to this. Help us by reducing taxes,” says Ndegwa.

EABL also ensured that it streamlined the distributorship channel by making it only two level. The only personnel involved were hundreds of distributors and the final retailers. The booze would be transported in barrels and then served into branded plastic cups unlike the use of bottles which would be quite expensive.

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Tax Challenges 

Even though the brand had navigated  treacherous thickets, its high sales became the taxman’s magnet in 2013 when excise tax incentives were cut by 50%. The ripple effect proved to be an economic catastrophe that rendered thousands jobless as consumers abandoned Senator for traditional brew.

Retailers soon closed shop while sorghum farmers were caught in a storm of reduced demand for their produce. As its sales plummeted, the government moved quickly and gave a 90% tax remission in 2015.

However, there have been flip-flops on taxation of Senator keg with mainstream media reporting that the beer’s price might increase in the near future.

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