Tea auction to be handed over to private firm in high-stakes move

Kenya’s tea industry is facing one of its most consequential moments in decades following revelations that management of the Mombasa weekly tea auction is set to be transferred from the East Africa Tea Trade Association (EATTA) to a private company putting both the Kenya Tea Development Agency (KTDA) and their regulator, the Tea Board of Kenya (TBK) on a collision course.

Investigations indicate the proposal originated from senior officials at the Tea Board of Kenya (TBK), some of whom, according to insiders are involved in tea brokerage and thus this amount to possible conflict of interest.

However, The Informer Media Group has since established that the proposal has already been submitted for approval, making the transition increasingly likely.

“There is apparent conflict of interest since some of those in TBK leadership are also tea brokers,” an insider revealed.

The move represents an unprecedented shift in governance of the Mombasa auction, the world’s largest black CTC (Crush, Tear, Curl) tea marketplace and a key price-setting centre accounting for about 32 per cent of global tea exports. For thousands of farmers, brokers and buyers across East Africa, the potential handover has triggered deep unease about transparency, pricing stability and equity in an industry that supports millions of livelihoods.

TBK, established under the Tea Act of 2020 and operating under the Ministry of Agriculture, is mandated to regulate and develop the sector.

However, its leadership led by CEO Willy Mutai and board chairman Ndung’u Gathinji is now under scrutiny over the proposed privatisation.

Stakeholders fear the regulator may be overstepping its role by facilitating a fundamental restructuring of the auction without sufficient consultation.

For more than 60 years, EATTA has run the Mombasa auction as a non-profit, member-based organisation representing growers, buyers and brokers across the region. Founded in 1956, EATTA has prioritised market stability, broad participation and long-term sustainability over profit.

Critics of the proposed change warn that replacing this model with a private, profit-driven entity could weaken oversight and undermine trust in the auction’s pricing and decision-making processes.

Industry insiders argue that a private operator may prioritise revenue generation, potentially introducing higher auction fees and increasing transaction costs for producers.

Smallholder farmers who already operate on thin margins would be hardest hit. There are also fears that private management could open the door to political and commercial interference, allowing elite interests to influence auction outcomes in a sector critical to Kenya’s export economy.

Another major concern is price volatility. The Mombasa auction plays a central role in global tea price discovery, and any disruption to its governance could destabilise markets.

Brokers worry their bargaining power would be diminished, while prices could become more unpredictable if profit maximisation overrides market balance and stability.

The privatisation push coincides with proposals to centralise tea grading in laboratories, replacing traditional tea testers. This follows long-standing complaints about price disparities between tea grown east and west of the Rift Valley.

Tea from eastern regions, particularly around Mt Kenya, consistently fetches higher prices, fuelling allegations of grading bias and systemic inequities disadvantaging western Rift farmers.

These tensions are mirrored within the Kenya Tea Development Agency (KTDA), the country’s largest smallholder tea organisation, which is grappling with internal divisions and mounting farmer discontent.

KTDA’s chairman Chege Kirundi and CEO Wilson Muthaura both hail from eastern Rift regions, a fact that has intensified claims of leadership bias from farmers in Kericho, Nandi, Bomet, Kisii and other western areas.

Farmers from these regions argue they receive lower prices and bonuses despite producing high-quality tea, blaming poor infrastructure, outdated factories and inconsistent investment. Calls are growing for KTDA to appoint a CEO from the western Rift Valley to address perceived regional imbalances, a proposal that has split the agency’s 12-member board into rival factions.

Political tensions have further inflamed the crisis. Agriculture Principal Secretary Dr Paul Ronoh has openly criticised KTDA’s leadership, accusing it of sabotaging reforms and short-changing farmers.

However, his intervention has been interpreted by some as politically motivated, given his reported ambition to contest the Kericho governorship in 2027. Farmers have accused him of exploiting sector grievances for political gain.

Frustration among tea growers is now boiling over. Farmers are threatening nationwide protests if political interference persists and are demanding the reinstatement of Rainforest Alliance certification, which they see as critical to accessing premium global markets.

They also want urgent action to address persistent regional price disparities and declining competitiveness.

As Kenya’s tea sector stands at a crossroads, the proposed privatisation of the Mombasa auction has become a lightning rod for deeper governance failures.

While supporters argue private management could improve efficiency, critics warn of serious risks reduced transparency, political capture, market instability and further marginalisation of smallholder farmers.

With billions of shillings in export earnings and millions of livelihoods at stake, the decisions taken in the coming months will shape the future of one of Kenya’s most important industries.

Without strong safeguards and meaningful reforms, stakeholders warn that the auction handover could deepen existing inequalities and push the tea sector into an era of heightened uncertainty.