Tea Board of Kenya orders Mombasa auction proceeds paid directly to KTDA factories to enforce Tea Act compliance
TBK has moved to stop brokers from routing tea sale proceeds through management agents, tightening oversight of KTDA factory payments.
KENYA – The Tea Board of Kenya (TBK) has directed organisers, brokers and buyers at the Mombasa tea auction to deposit all cash proceeds from sales directly into the bank accounts of 54 Kenya Tea Development Agency (KTDA)-managed factories within 14 days of each transaction.
The directive follows revelations that factories run by KTDA Management Services Limited had been registered with auction organisers through the management agent, in violation of the Tea Act, 2020.
Affected factories have been given until January 24, 2026, to register directly with both the auction organiser and the board, and to confirm they have access to electronic trading platforms to enable oversight and monitoring of auction proceedings.
TBK chief executive officer Williy Mutai said some brokers and auction organisers had been channelling tea proceeds through management agencies, a practice he said contravenes the law.
“Section 36 (2) of the Tea Act 2020 requires all tea factory limited companies to register directly with the board (TBK) and the auction organiser in order to participate in the tea auction, and not through management agents,” Mutai said in a memo addressed to KTDA and tea brokers.
Mutai added that the regulator would intensify monitoring to ensure full compliance with the law. “TBK shall undertake routine inspection and compliance audits to assess adherence to the directives and other applicable provisions of the Tea Act, 2020,” he said, warning that those who fail to comply will face penalties.
The move comes as Kenya’s tea industry continues to face significant challenges, including a glut at the Mombasa auction, largely caused by political upheavals in key export destinations for Kenyan tea. At the same time, KTDA has been implementing management reforms following declining earnings for growers.
KTDA chairperson Chege Kirundi said farmer payments fell sharply in the 2024/2025 financial year due to market and currency pressures. “The drop in payment was attributed to market forces and the shilling to dollar exchange rate dynamics in the year under review,” Kirundi said.
KTDA paid growers KES 69 billion in the 2024/2025 financial year, down from KES 89.29 billion in the previous year, reflecting a decline of KES 20.6 billion.
In response, KTDA is pursuing value addition through orthodox tea production to raise farmer incomes, targeting markets such as Japan, Russia, China, Germany, Iran, France, and countries in the Middle East and Eastern Europe.
The auction reforms come amid broader government measures to strengthen transparency and protect farmers, including a ban on using tea farmers’ funds as collateral for bank loans, the closure of multiple factory bank accounts in favour of a single general account, lifestyle audits of current and former directors, and the phasing out of the inter-factory loan programme in favour of commercial bank financing.
Sign up HERE to receive our email newsletters with the latest news and insights from Africa and around the world, and follow us on our WhatsApp channel for updates.
