BAT Kenya completes the first phase of its new US$23m ‘Lyft’ factory

KENYA – Cigarettes manufacturer British American Tobacco-Kenya (BAT) has completed the first phase of its new US$23 million Nairobi based factory.

The hub centred on the production of free oral nicotine pouches for the African market and the globe is expected to support up to 80 new skilled jobs once complete.

The factory is a central pillar in BAT’s diversification away from just the manufacture and marketing of cigarettes.

Progress on the multi-billion facility nevertheless comes against an ongoing tug of war between the firm and Kenya’s Ministry of Health over the regulation of its oral nicotine pouches marketed under the Lyft brand name.

In March 2021, BAT lamented plans by the country’s Ministry of Health (MOH) to classify the products as tobacco products which would sink the product under provisions of the Tobacco Control law.

The classification of the pouches under the legislation would see its products targeted with a similar tax rate and marketing restrictions as traditional cigarettes.

In October 2020, the country’s Health Cabinet Secretary Mutahi Kagwe threw a spanner in the works of BAT product diversification plans by deeming the registration of the nicotine pouches illegal.

Anti-tobacco lobby groups such as the Kenya Tobacco Control Alliance (Ketca) for example want the product banned arguing its ease of access to minors.

“BAT Kenya said it had invested in a US$23 million oral nicotine production facility to serve the regional export market in East Africa and beyond”

BAT which remains in talk with Kenyan government to clear the production and marketing of the product meanwhile sees Lyft as a substitute to cigarettes for addicted smokers.

In its 2020 annual report, published earlier this week, BAT has listed discussions on how to navigate challenges in respect to Lyft as part of its strategic board activities.

In October 2020, BAT Kenya, which is part of British American Plc, said in June 2020 that it had invested in a US$23 million oral nicotine production facility to serve the regional export market in East Africa and beyond.

The new factory, which BAT Kenya says is the first of its kind in Africa, is part of the group’s plan to follow the changing habits of tobacco consumers.

But in a letter to the country’s Pharmacy and Poisons Board, which regulates the sale of the products, CS Kagwe accused it of violating several provisions of the law when it licensed LYFT.

“Market surveillance has revealed that the product is dispensed in automatic vending machines contrary to the law,” Kagwe said.

The Cabinet Secretary demanded the regulator provide the ministry with a “comprehensive report on the criteria used and circumstances leading to the registration and licensing of the product.”

Liked this article? Subscribe to DealStreet Africa News, our regular email newsletter with the latest news, deals and insights from Africa’s business, economy and more. SUBSCRIBE HERE

Leave a Comment

This site uses Akismet to reduce spam. Learn how your comment data is processed.