A commercial dispute in Kenya’s beer industry has taken a new turn after a local distributor asked the High Court to block British multinational Diageo Plc from selling its majority stake in East African Breweries Limited (EABL) to Japan’s Asahi Group.
Bia Tosha Distributors has moved to court seeking urgent orders to stop the deal valued at about $2.3 billion (Sh296.7 billion).
The petitioner and Diageo entities are engaged in a legal battle, with the parties fighting over whether the distributor has exclusive rights to multiple territories, including in the capital Nairobi.
Bia Tosha now wants Diageo barred from selling, transferring, or disposing of its shareholding in EABL and its Kenyan subsidiaries, including Kenya Breweries Limited and UDV (Kenya) Limited, pending determination of a constitutional petition that has been in court since 2016.
The distributor argues that Diageo’s planned exit from Kenya through a private share sale to Asahi Group Holdings Limited, a company based in Tokyo, would strip the courts of effective jurisdiction and render ongoing proceedings nugatory.
It says Diageo’s shares in EABL are the multinational’s only known asset and security within Kenya.
The application, filed under a certificate of urgency, asks the court to preserve the status quo over ownership and control of Diageo’s EABL stake until the case is resolved.
The sale began in December 2025 when the proposed transaction was announced in Kenya.
“This court’s jurisdiction and authority are at risk of being frustrated if the intended share sale proceeds,” the distributor’s advocate argues, warning that Diageo would exit the country and make enforcement of any final orders “practically impossible.”
The dispute has its roots in distribution agreements between Bia Tosha and companies within the Diageo group.
Bia Tosha has for years accused Kenya Breweries, UDV (Kenya), EABL, and Diageo of unlawfully repossessing its distribution territories and refusing to refund goodwill payments, actions it claims breached constitutional and competition law protections.
In February 2023, the Supreme Court reinstated High Court conservatory orders first issued in June 2016, preserving the status quo pending the hearing of the constitutional petition.
The apex court faulted the lower courts for failing to conclusively address the issues raised and directed that the matter proceed on priority.
Despite those rulings, Bia Tosha says the Diageo entities have persistently disobeyed court orders at every stage of the litigation.
In a supporting affidavit sworn by its managing director, Anne-Marie Burugu, the distributor lists what it describes as “continued and contemptuous” disregard of orders issued by the High Court, the Court of Appeal, and the Supreme Court.
Against that background, the distributor contends that Diageo’s proposed sale of its EABL stake is not an ordinary commercial transaction but a calculated move to defeat the court process.
The application claims the transaction was timed for the Christmas holiday period to allow it to be fast-tracked before courts fully resumed.
Bia Tosha's advocate says the matter cannot wait until the next court term because regulatory approvals under capital markets rules could be sought and granted within days.
“Unless the share sale is stopped, the substratum of the petition will be irreversibly eroded,” the advocate states.
The distributor is asking the court to issue orders in rem, binding the disputed shares regardless of any contractual arrangements Diageo may enter into after the filing of the application. It also wants the petition and all pending applications heard together, with a composite ruling delivered.
It argues that Diageo’s foreign status heightens the risk of non-enforcement of Kenyan court orders once the sale is finalised.
The distributor says past conduct shows that undertakings by Diageo would be insufficient protection.
The application paints the dispute as one with wider public interest implications, touching on the protection of constitutional rights and the authority of Kenyan courts over multinational corporations operating in the country.
“There is no other effective means by which this court can compel obedience other than through prohibition of the sale,” the court papers state.
For Diageo, the proposed transaction with Asahi would mark a significant restructuring of its African footprint, with EABL being one of its most valuable assets on the continent.
The deal has drawn close attention from investors, regulators, and now the courts, given EABL’s dominant position in Kenya’s alcoholic beverages market.
The High Court is yet to hear the application, and the respondents —Kenya Breweries Limited, UDV (Kenya) Limited, EABL, and Diageo PLC— are yet to file their responses.
If granted, the orders sought would temporarily freeze Diageo’s ability to complete the high-profile sale, adding a legal hurdle to one of the largest corporate transactions in Kenya’s recent history. The case is scheduled for hearing on January 9, 2026.
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