April 12, 2024

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Uganda protest over seized Lato Milk in Kenya worth 1.4 bn Ugshs

3 min read

The Uganda government through the foreign affairs has officially protested to the government of Uganda through the high commission of the Republic of Kenya over the imposed restriction on importation of Uganda milk and milk products.

In a written three paged protest document on Business Detect desk Uganda foreign ministry decries the continued deliberate constrain and imposed unwarranted restriction on the smooth importation of Ugandan milk under the Lato Brand that led to Kenya authorities to confiscation of 54, 310 kgs of powder milk valued at USD 203,630 and 262,632 litres of milk valued at USD 157,106 .

According to Uganda this contravenes the principle of good neighbourliness and Kenya obligations under the treaty of establishing the East African Community, Customs Union and Portal and Common Market Protocol and WTO trade facilitation agreement.

In December Mr Amit Sagar, the Pearl Dairy chief executive officer, told reporters of a local paper that they were ready to cooperate with the Kenyan government to resolve the impasse.
“We are cooperating with all government agencies to provide the necessary documents to confirm the above to put to an end to the false reports circulating,” he said.

Mr Sagar also refuted claims that Pearl Dairy imports and repackages its milk products, saying: “100 per cent of our milk is produced and processed in Uganda. We do not reconstitute any milk powder to make our UHT milk products.”

All of the company’s milk, he said, is sourced from more than 10,000 smallholder farmers in western Uganda, which is later processed in Mbarara and put on the local market with some exported specifically to Kenya.

Last month, Kenyan officials visited Uganda to ascertain whether indeed the milk was coming from Uganda. They concluded that Kenya would be imposing a 16 per cent Value Added Tax (VAT) on Ugandan milk.

Uganda has seen its milk production grow tremendously with reforms in the dairy sector to 2.6 billion litres a year in 2018. At least 144 million litres are sold in Kenya every year, according to industry estimates. Kenyan companies like Fresh Dairy are big processors of milk exported there.

Good weather has also seen Kenya up its production to 5 billion litres a year. This with the milk imported from Uganda has depressed the local market, forcing Kenya to start measures to curtail Kampala milk. In 2010, Kenya blocked milk from Uganda to protect its farmers.

The 3 paged protest letter Uganda reminds Kenya that it provides a significant market for Kenya with imports worth USD 720.4 Million in 2018/2019 and as over today trade in Uganda and Kenya is in Kenya’s favour.

Uganda noted that its very unfortunate that an increase in exports of milk by Uganda can elect such a profound and negative reaction from Kenya.

Uganda requests Kenya that

  1. Immediately release the seized consignment of {Lato} branded milk as they were duly cleared by the relevant Kenyan government bodies for importation into Kenya and are not contraband,substandard and or counterfeit as alleged.
  2. Cease any operations specifically targeting Ugandan made milk exported to Kenya.
  3. Refrain from any actions against Uganda’s exports to Kenya be it milk or any other products that contravene the EAC customs union protocol and common market protocol.
  4. Take responsibility for any spoilage of the products that may have been suffered during the illegal detention of the products and losses suffered in accordance with the EAC NTB elimination Act 2017.
  5. Address any trade concerns within the existing EAC and bilateral frameworks rather than using arbitrary means that could jeopardise the otherwise blossoming trade relations between the two countries.

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