How milk ATMs are presenting a major competition to the large processors in Kenya
Nairobi now accounts for two-fifths of milk vending machines, popularly known as ATMs, presenting major competition to the large processors.
Data from the Kenya Dairy Board (KDB) indicates the number of the machines have now hit 275 from virtually none a few years back, with the capital city accounting for 62 per cent of the total units.
Milk from a vending machine is cheaper than the one from the processors, making it popular with consumers. A litre of is currently retailing at Sh65 while half a litre from the processors goes for Sh50.
KDB managing director Margret Kibogy says the growing number of ATMs is good as it gives consumers access to quality milk.
“The number of milk vending machines that we have licensed has been growing over the years and this is a good move as it gives consumers an opportunity to consume safe milk,” she said. Milk processors have previously raised concern over the growing numbers of ATMs as it eats into their market share.
Traders who want to operate the dispensers pay Sh600 as licence fee to KDB to be allowed to sell milk to the public.
Kenya has 25 registered milk processors with the main ones being Brookside, New KCC and Githunguri Dairies.
The growing number of ATMs comes at a time the regulator says it has put in place regulations to ensure the safety of milk sold through the vending machines.
The rules require all milk to be pasteurised (heated) while all operators have to undergo medical examination to certify that they are fit to handle food products.
“All milk that is sold through vending machines has to be pasteurised.
“Currently, traders are not doing this and many at times sell raw product; these regulations will ensure compliance with the set standards,” said the regulator in June.
The regulations also limit the number of days the milk can stay in the dispenser to less than 24 hours from the date of delivery.
Installed processing capacity in the country has increased from 2.9 million litres a day to 3.5 million litres in the past five years, according to the KDB. But raw milk sales dominate.
The dairy sector contributes over 14 per cent of gross domestic product (GDP) in the agricultural sector and injects four per cent into the country’s GDP.