Bia Tosha, Kenya’s largest beer distributor, has sued top East African Breweries Limited managers for contempt of court, which could see them jailed for six months or fined Ksh30 million.
In court papers filed at the High Court this week, Bia Tosha, through lawyer Ken Kiplagat, is are asking the court to punish EABL directors Drew Cowan and Jane Karuku together with Kenya Breweries Limited(KBL) sales Director Andrew Kilonzo for disobeying the court.
High Court judge Louis Onguto in June issued the order barring EABL from terminating its contract with Bia Tosha, after the distributor filed a petition claiming the brewer had threatened to terminate its distribution contracts for 22 routes.
The distributor holds that it has paid more than Ksh38 million in goodwill for the distribution routes, which EABL has declared as part of its profit over the years. Despite the court order, EABL has gone ahead and assigned other distributors areas that were exclusively Bia Tosha’s. EABL has also refused to supply Bia Tosha with its products.
EABL, the region’s largest brewer, had in June lost its second bid to appoint another beer distributor on the same routes owned by its single-largest distributor.
“KBL contemptuous actions have brought the operations of the petitioners to a halt and therefore greatly prejudicing the petitioner,” Bia Tosha argues in its pleading in court, adding that the livelihood of more than 200 workers it employs is in jeopardy.
The court orders barred EABL from appointing another distributor to supply its products in Namanga, Bissil, Kajiado, Kitengela, Athi River, Industrial Area, South B, Nairobi West, Kenyatta, Lang’ata, Rongai, Kiserian, Magadi, Upper Hill, Ngong Road, Hurlingham, Kawangware, Satellite, Dagoretti, all these, exclusively Bia Tosha routes.
Bia Tosha claims in the petition that the brewer has been intimidating it and other suppliers into exclusively distributing its products. The firm says that EABL has waged a war against it to take down Bia Tosha for seeking to work with competing alcohol manufacturers.
Ann-Marie Burugu, a Bia Tosha director, claims that EABL’s parent company Diageo has been coercing local distributors into locking out rival manufacturers as part of a scheme to defeat anti-monopoly laws enacted in 2011.
She claims that some of the threatening messages were racist in nature. “I personally received many intimidatory electronic messages all calculated at bludgeoning me into submission. Some of these electronic messages were highly offensive,” Ms Burugu holds.
Bia Tosha has attached some of the alleged threats in its petition. “As a friend let me just say you’re taking some pretty bad decisions. Playing chicken with a multinational is (sic) really the wisest business negotiation tactic. Unless of course BT (Bia Tosha) is no longer that important to you,” one of the messages the Bia Tosha director says it received reads.
The firm founded by former EABL worker Peter Burugu is one of the brewer’s largest distributors alongside Rwathia, Kamahuha, Veew and Ishano Distributors.
[crp]
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