Eleven firms get reprieve to clear stocks of Distell brands
Models display a bottle of Amarula. The Competition Authority of Kenya allowed Kwal to solely import and distribute 16 alcoholic brands from Distell of South Africa. PHOTO | FILE
What you need to know:
The affected distributors will be free to clear their supplies, but will not be allowed to import fresh consignments of Distell brands.
Kwal will solely import and distribute 16 brands including brandies, wines, and whiskeys from the South African company.
Distell brands such as Drostdy-Hof, Two Oceans, and Chamdor juices account for half of Kwal’s turnover.
Eleven firms that previously imported brands made by South African alcoholic beverages firm Distell, including Amarula and Viceroy, have received a temporary reprieve after they were allowed to deplete their stock as the products are exclusively handled by Kenya Wine Agencies Ltd (Kwal).
The Kenya Revenue Authority (KRA), which supplies excise stamps to approved importers of alcoholic drinks, said the affected distributors will be free to clear their supplies, but will not be allowed to import fresh consignments of Distell brands.
The Competition Authority of Kenya early this year allowed Kwal, owned 26 per cent by Distell, to solely import and distribute 16 brands including brandies, wines, and whiskeys from the South African company.
“All products imported before the effective date of the notice will continue being distributed,” KRA said in a statement to the Business Daily. “All registered importers were invited for sensitisation on December 6, 2016 where this issue was discussed. The importers were given one month to ensure that all products already on their way to Kenya will have arrived and been cleared,” the taxman said.
Distell brands such as Drostdy-Hof, Two Oceans, and Chamdor juices account for half of Kwal’s turnover, according to regulatory filings with the competition watchdog.
Kwal’s exclusivity deal took effect in December 2014 and expires in 2019, said the competition regulator, adding that no importer raised objections against the contract.
Other brands now fully handled by Kwal are Cellar Cask, Fleur du Cap, JC Le Roux, Chateau, Klipdrift, Van Ryn’s, Castle Brand, Clubman, Count Pushkin, Savanna Cider and Scottish Leader.
Distell in 2014 spent Sh860 million to acquire a 26 per cent stake in Kwal, in a strategic move to guard its interests in the Kenyan market.
Buying a stake in Kwal and the exclusivity deal were part of the arrangements after Distell in 2012 threatened to end its 14-year partnership with Kwal and enter the Kenyan market on its own.
The government, through the Industrial and Commercial Development Corporation (ICDC), previously owned a 72.65 per cent shares in Kwal.
State-owned ICDC now remains Kwal’s majority shareholder with a 42.65 per cent stake, Centum (26.43 per cent), Distell (26 per cent) while employees have four per cent set aside for them. The uptake of the employee reserved stake has been negligible.
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