Distributors lose first round of EABL, Keroche beer bottles war

The High Court has allowed East African Breweries Ltd #ticker:EABL to mop up its branded beer bottles from the market, pending the determination of a case filed by six distributors affiliated to its rival Keroche Breweries.

Justice Grace Nzioka directed on Friday that the beer maker collects only its embossed bottles and restricted the two firms from placing any advertisements on the matter, pending her ruling.

The distributors accuse EABL of working to drive them out of business by embossing beer bottles that have the universal shape with unique initials to prevent rivals from using them.

But the brewer, through lawyer Kamau Karori, argued for the striking out of the case saying that a similar matter, raising the same issues was pending before another judge.

Mr Karori further argued that the distributors had no authority to file the petition because they have no direct business connection between them and EABL to warrant the issuance of the orders sought. The embossment, he said, is done at the point of manufacture by the glass maker, with a lifespan of five years, and that the bottles are returnable and reusable.

But through lawyer Irungu Kang'ata, the distributors claimed they were suffering because they were being arrested by police and taken to court over the battle for the bottles.

Mr Kang'ata said the distributors were also supplying beer for other manufacturers beside Keroche and that the issue of whether they were only distributing for the Naivasha-based firm could be determined during the main court hearing.

The six distributors —Alexander Mugo, Jacob Wamiti, Phasty Wachira, Samuel Kamau, Catherine Wanjiru and Herman Mwaura— said EABL was interfering with their only source of income by embossing beer bottles with exclusive marks or unique initials, a move they said was aimed at driving Keroche Breweries out of the market.

They argued that EABL's actions were predatory and a negation of principles of a free and competitive market economy.

Keroche’s Summit beer bottles are similar to those of EABL’s White Cap and Balozi brands, making it easier for both brewers to interchange the brown bottles.

The distributors are seeking a permanent injunction barring EABL and its subsidiary Kenya Breweries Limited (KBL) and their agents from branding beer bottles.

EABL on its part said it purchases its engraved bottles from a leading glass maker in Kenya and it currently packages its products in over 10 varieties of beer bottles.

Justice Nzioka will rule on whether to strike out the case or issue interim orders stopping EABL from collecting the bottles on January 24.

In the other case, High Court had issued orders stopping Keroche from using bottles and crates engraved with the EABL logo.