Distell to market products despite legal tussle with Kwal
A customer buys wines from a supermarket in Nairobi. Distell has said it will continue to market its products in Kenya despite an ongoing court battle and opposition from business partner Kenya Wine Agencies Ltd (Kwal) Photo/FILE
What you need to know:
The State-owned alcoholic drinks maker moved to court in August to stop Kwal from terminating a 14-year exclusive distribution contract.
Kwal last week said it would seek contempt charges against Distell after it started to market some of their products.
Distell is the owner of flagship brands like Amarula and Viceroy—which it rebranded and began to market under its name despite Kwal’s claims that the move was against court orders.
Wednesday, Distell said it would continue to market some of the products on the strength of an earlier agreement.
South Africa’s Distell has said it will continue to market its products in Kenya despite an ongoing court battle and opposition from business partner Kenya Wine Agencies Ltd (Kwal).
Distell is the owner of flagship brands like Amarula and Viceroy—which it rebranded and began to market under its name despite Kwal’s claims that the move was against court orders.
Wednesday, Distell said it would continue to market some of the products on the strength of an earlier agreement.
“The upgrade of the Viceroy pack, the use of the Distell logo and certain marketing functions by Distell Winemasters are done in accordance with the agreement with Kwal and have been in existence and implemented before the current dispute,” said Distell’s communication manager Heidi Bartis in an email response to the Business Daily.
“Distell has not begun its own distribution of Viceroy. All distribution is done by Kwal, pending the final settlement of the dispute.”
Distell wants to sever links with the Kenyan firm on grounds that continued delay of a privatisation process is frustrating its strategic plans.
The government, with a 73.57 per cent stake in Kwal, had promised the South African company ownership in the firm but this has been delayed.
Kwal is the sole marketer of up to 80 of Distell’s brands in Kenya, accounting for 60 per cent of its profit.
Investment bankers say that the exit of the South African firm would render Kwal a near shell, making it almost impossible to find a buyer when the government is looking to reduce its 72.6 per cent stake.
“This is an outright contempt of court, we now intend to move to court to have Distell halt production of Viceroy,” an executive of Kwal said when Distell started marketing the rebranded Viceroy
“I can assure you that we will move to court before October 2, we are now seeking direction from our lawyers. The new packaging in distinct bottles and labelling indicates that Distell is either importing or manufacturing Viceroy, which is against court orders which granted a stay on the status quo.
Kwal obtained an injunction restraining Distell from terminating the contract until the dispute between them is heard and determined.
The matter is due for hearing on October 2.
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