President John Magufuli’s government has made a U-turn on Brookside Dairy which is owned by President Uhuru Kenyatta’s family.
Brookside Dairy is among the nearly 20 Kenyan companies that have been blocked from accessing the Tanzanian market.
The move comes despite Sunday’s truce between the two countries cross-border spat.
On Sunday, the two countries signed a pact removing restrictions that had cost traders billions of shillings.
The Foreign Affairs ministers of the two East African nations - Amina Mohamed and Augustine Mahinga- during the signing said , Tanzania and Kenya had agreed to end the import restrictions after ironing out long-standing trade differences.
Kenya lifted the restrictions it had imposed on Tanzanian wheat flour and liquefied petroleum gas (LPG) while Tanzania reportedly removed its blockade of Kenyan milk and milk products, and cigarettes.
However, according to Standard Digital, Brookside Dairy remains blocked despite the lifting of deal lifting trade restrictions between the two countries.
On Wednesday, KAM chief executive Phyllis Wakiaga said Kenyan traders who had set out to test the effectiveness of the truce had found some of the restrictions intact, bringing into question its execution.
“We were told to export and see whether the restrictions still exist. We have just done that and found that some products such as margarine, ice cream and tobacco can still not access the Tanzanian market,” Ms Wakiaga said.
Shortly after he ascended to the Presidency in 2015, Magufuli accused Brookside of ‘unfriendly’ business practices.
While addressing Tanzania Private Sector Foundation, he said it was not fair for Brookside Dairy Limited to collect milk from Tanzania, process it in Kenya and then sell back to them.
Other companies affected by the trade ban include another milk processor New KCC, cigarette manufacturer BAT, all the cement makers, Vivo Llubricants, which markets Shell lubricant brands and Bidco Oil Refineries.