EABL’s distributor gets order barring brewer from picking replacement
Bia Tosha director Ann-Marrie Burugu. PHOTO | SALATON NJAU
What you need to know:
The High Court issued the orders after Bia Tosha filed a petition claiming that EABL has threatened to terminate its distribution contracts for 22 routes.
The distributor holds that it has paid over Sh38 million in goodwill for the distribution routes, which EABL has declared as part of its profit over the years.
Ann-Marie Burugu—a Bia Tosha director—claims that EABL’s parent company—Diageo-- has been threatening local distributors to coerce them into shunning rival manufacturers.
Beer maker East Africa Breweries Limited (EABL) has been temporarily stopped from appointing another distributor on the supply routes of its single-largest distributor--Bia Tosha.
High Court judge Louis Onguto on Tuesday issued the order after Bia Tosha filed a petition claiming that EABL has threatened to terminate its distribution contracts for 22 routes.
The distributor holds that it has paid over Sh38 million in goodwill for the distribution routes, which EABL has declared as part of its profit over the years.
Bia Tosha claims in the petition that the UK-owned brewer has been intimidating it and other suppliers into exclusively distributing its products.
The firm says that EABL has waged a war against it to take down Bia Tosha for seeking to work with competing alcohol manufacturers.
Justice Onguto on Tuesday ruled: “Pending the hearing and final determination of this petition, a conservatory order in the nature of an injunction do issue directed at EABL and UDV Kenya barring them from interfering with the exclusive management of their products in Namanga, Bissil, Kajiado, Kitengela, Athi River, Industrial Area, South B, Nairobi West, Kenyatta, Lang’ata, Rongai, Kiserian, Magadi, Upper Hill, Ngong Road, Hurlingham, Kawangware, Satellite, Dagoretti, UDV A, UDV B, UDV C which are owned by the petitioner, for 14 days,” Justice Onguto ordered.
The EABL has not yet responded to the suit, but will appear before Justice Onguto on June 28 at the hearing to argue out why the temporary order should not be extended.
Ann-Marie Burugu—a Bia Tosha director—claims that EABL’s parent company—Diageo-- has been threatening local distributors to coerce them into shunning rival manufacturers as part of a scheme to defeat anti-monopoly laws enacted in 2011.
She claims that some of the threatening messages were racist in nature.
“I personally received many intimidatory electronic messages all calculated at bludgeoning me into submission. Some of these electronic messages were highly offensive. A Diageo senior representative in Cameroon was deputed by Diageo London to intimidate local distributors and he proceeded to issue various threats,” Ms Burugu holds.
Bia Tosha has attached some of the alleged threats in its petition.
“As a friend let me just say you’re taking some pretty bad decisions. Playing chicken with a multinational is (sic) really the wisest business negotiation tactic. Unless of course BT (Bia Tosha) is no longer that important to you,” one of the messages Bia Tosha says it received reads.
The firm founded by former EABL worker Peter Burugu is one of the brewer’s largest distributors alongside Rwathia, Kamahuha, Veew and Ishano Distributors.
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