New rules block coffee dealers from holding multiple licences
Some coffee dealers are likely to lose their licences following a new rule set that limit the number of permits that a trader in the retail business can hold.
In January, the issue of sibling companies being involved in the coffee business came up at the weekly auction when some farmers complained, citing conflict of interest.
They pointed a finger at the Agriculture and Food Authority, which is the industry’s regulator wondering why it had issued different licenses to the sister companies.
For instance NKG Mills, a miller owned by Neumann Kaffee Gruppe, is the same company which owns Tropical Farm Management and Ibero Kenya Limited. The former is a marketing agent while the latter is a coffee exporter or a dealer.
The three companies are among others that have been involved in the coffee business at the sale.
Similarly, Sustainable Management Services (SMS) – one of the coffee marketer licensed to do business at the auction is owned by ECOM Agroindustrial Corp Ltd. The global company has merged with Coffee Management Services (CMC), which owns Central Kenya Coffee Mills and CMC Mills of Eldoret.
All these companies have legally been doing business at the auction but the question remains: does the licensing authority know that they are one?
Mr Kiplimo did not respond to the question sent to him through email. Issues that farmers were raising is that when grading green coffee beans, millers are supposed to give the commodity a reserve price before negotiating with the dealer, which was previously the work of a marketing agent.
Despite rejecting the draft CSIR developed over some sections regarding mode of paying growers their money, many farmers have supported this idea of revoking licences of sister companies.
“A licensing authority may after inspection and evaluation of an application received under these regulations, grant the licence applied or reject the application,” say the rules.
All licences are expiring at the end of next month meaning that players involved in the coffee business are required to apply for others afresh.
In the rules, which are being subjected to public participation, agents have no role in the marketing of coffee as their work will be done by millers.
Most millers double as marketing agents and chairman of CSIR, Prof Joseph Kieyah did not want to dwell much on this issue and only said:
In the draft document, which has been revised from a previous one growers rejected last year, counties will be sharing responsibilities of issuance of certificates and licences with the authority.