NAIROBI, Kenya- In a move set to shake up East Africa’s tea industry, Kenya’s competition regulator has given the green light for UAE’s B Commodities to acquire a significant 98.56pc stake in Lipton Teas and Infusions.
This merger, now one of the region’s most anticipated deals of the year, signals a major shift in market dynamics and competition.
With the Competition Authority of Kenya (CAK) granting approval, B Commodities is set to boost its market share in Kenya’s tea sector to 10.7pc, up from Lipton’s current 6pc.
While this solidifies their position, the move still leaves a significant 89.3pc of the market open to competitors.
Notably, the Kenya Tea Development Agency (KTDA) dominates with a massive 48.8pc share, while Eastern Produce Kenya Ltd. and Williamson Tea hold 5.6pc and 4.3pc respectively.
Kenya’s tea industry is a heavyweight on the global stage, producing 450 million kilograms annually and generating KSh 163 billion from exports alone.
Domestically, tea sales rake in an additional KSh 22 billion, according to data from the Agriculture and Foods Authority .
Concerns over potential job losses have been put to rest by the CAK, which confirmed that the merger would not result in any layoffs.
All 9,715 employees at Lipton Teas and 405 workers at Limuru Tea will retain their positions. This decision comes as a relief in an industry often fraught with employment uncertainties during such large-scale acquisitions.
The merger is expected to enable Lipton to sharpen its focus on brand management and enhance value-addition efforts, ensuring that its products remain competitive and innovative in the global market.
However, the deal has not been without controversy. Local communities have voiced their frustrations, claiming they were bypassed in the sale process.
They argue that cooperative societies had expressed interest in purchasing the estates, but their offers were overlooked in favor of B Commodities, a subsidiary of Sri Lanka’s Browns Investments PLC.
Lipton announced earlier this year that it would divest from its tea estates across the region, including properties in Tanzania and Rwanda.
Browns Group has since acquired these assets, expanding its footprint with an aim to produce 87 million kilograms of black tea annually. The company’s global estate portfolio now spans 40,000 hectares, producing 43 million kilograms of black tea .
Lipton’s legacy in Kenya dates back to 1914, and as it pivots to a new business model, the company has committed to reinvesting its proceeds in the region.
This pledge comes amid ongoing scrutiny, with many viewing the estates as symbols of injustice. Local communities continue to challenge the legitimacy of these lands, claiming they were originally taken without consent.
