Deal with liquor makers, suppliers will give Wow largest product variety in Kenya
The potential market concentration has seen Wow apply to CAK seeking approval for its exclusive distribution deal
Interested parties have 30 days to submit their written representations on the matter
Wow Beverages, a company owned by tycoon businessman Humphrey Kariuki, has signed an exclusive deal to import and distribute 214 premium wine and spirits brands including Bacardi-Martini labels.
The agreement with seven liquor manufacturers and suppliers will give Wow the largest product variety, beating its rivals including East African Breweries (EABL) which has tens of brands.
The potential market concentration has seen Wow apply to the Competition Authority of Kenya (CAK) seeking approval for its exclusive distribution deal which will lock out potential rivals.
“The clauses in the agreements will give Wow Beverages a portfolio of 214 wine and spirit brands that they can exclusively import and distribute in the Kenyan market also known as designated territory,” CAK said in a notice in the latest Kenya Gazette.
“The above requirements, if not exempted, will qualify as contraventions under the Competition Act, hence the application for exemption.”
Interested parties have 30 days to submit their written representations on the matter before the regulator makes its decision on the application.
Wow has signed distribution deals with Gallo Vineyards Inc (which trades as E&J Gallow Winery Europe), Vina San Pedro Tarapasca SA, Felix Solis Avantis SA, Afrique Interlink (PTY), Interlink (PTY) Limited, Edrington Group Limited and Tradall SA (Bacardi-Martini Group).
The multinationals have appointed Wow to import, purchase, promote, distribute and sell their selected portfolio of products in the Kenyan market.
The manufacturers and their agents are prohibited from appointing any other person as their distributors for the sale of the products in the local market.
They are also barred from supplying the products to any other person in other markets if they know that such products are intended for onward sale in Kenya. The sweeping agreements will broaden Wow’s current liquor portfolio which includes whisky brands Jack Daniels, The Famous Grouse, The Macallan; wine labels Graham Beck, ST Remy; and gin brand Bombay Sapphire.
Premium alcohol manufacturers are among the beneficiaries of increased spending on luxury goods and services by the country’s rich and middle class households whose number has been growing.
Nairobi alone, for instance, has some 5,000 dollar millionaires according to a previous study by New World Wealth.
