In July, 2019, the government released its budget to the people of Kenya for 2019/2020. The former Cabinet Secretary for Finance, Mr Henry Rotich acknowledged the decision to increase the Value Added Tax (VAT) on all alcoholic drinks following massive consumption of alcohol. "Parte after Parte eh"? Here is where it all starts.
East African Breweries Limited (EABL), being a leading alcohol producer in the republic of Kenya, was heavily affected by this. Their goods were being affected directly by this. I'm guessing that they sat down as a board and decided to increase the price of every bottle to cater for the tax being imposed on their products.
They decided to hit the cheap drinks..hard! They added Sh.20-Sh.40 to each beer, Sh.50-Sh.70 to their vodkas, whiskeys, brandys and rum. (Captain Morgan, Black and White na Gilbeys ziko hapa). The list is here. These are the drinks we poor university students struggle to afford on a daily...sorry...weekly basis. Yaani unachukua HELB ndio pesa ziwarudie tu. This increased their profits by a huge margins, even after the government took their share.
They are making profits in billions of shillings and funny thing is that not everyone knows about this. You only know they make 'a lot' of money. Take a look at this report and realize that they can finance half of the counties in Kenya.
Their value went up and so did their stock. This is a simple example of what the environment can do to affect the stock market and its major players. Parte after parte na plot sii ni form...ama?
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