Two more sue KBL and UDV fearing supply contract termination
East African Breweries Limited (EABL) CEO Jane Karuku during the release of the brewer’s half-year to December on January 27, 2023. Looking in is the EABL chairman Martin Oduor-Otieno. PHOTO | DIANA NGILA | NMG
Another two liquor distribution companies have sued beer makers Kenya Breweries Ltd and UDV (Kenya) over fears that the duo might terminate their agreements, intensifying fight between various beverage distributors for a share of the Nairobi and Kajiado markets.
Tony West Limited and Outlook Index Limited are claiming that KBL and UDV (Kenya) are intending to grant another company exclusive distributorship rights of 18 routes covered by the agreements.
Their suit comes days after another set of two firms, Ngong Matonyok Wholesalers Ltd and Manara Ltd, sued KBL and UDV (Kenya) Ltd over intended termination of distributorship contracts, and exclusively granting the supply routes to a third party.
Some of the market regions that the four companies are fighting to retain were returned to another distributor, Bia Tosha Ltd, by the Supreme Court last week.
In a judgment dated February 17, 2023, the Supreme Court allowed Bia Tosha Distributors to regain exclusive control of 22 liquor distribution routes, which had been repossessed by KBL in 2016.
The routes had been given out to other distributors. Resulting from the Apex court's judgment Bia Tosha has since issued an advert declaring itself exclusive distributor of the KBL products in the routes that it had lost.
But Tony West Limited and Outlook Index Limited have said that they are on the verge of losing an investment of Sh1.5 billion should KBL and UDV (Kenya) terminate the distributorship agreements they signed in November 2016 and May 2019.
"The plaintiffs have operated the business smoothly and uninterrupted until February 20, 2023 when a representative of KBL and UDV (Kenya) informed them in writing that they intend to grant another company exclusive distributorship rights over the territories covered by the distributorship agreements which are still valid and operational," their lawyer Peter Wanyama said in the court papers.
