EABL wins beer bottle war with distributors

Beer distributors allied to Naivasha-based Keroche Breweries have suffered a blow after the High Court dismissed a case they had filed against East African Breweries Ltd for allegedly harassing them over beer bottles.

Justice Alfred Mabeya upheld an objection filed by Competition Authority of Kenya (CAK) saying the dispute should have been referred to CAK first, before appealing to the High Court.

“Accordingly, I uphold the preliminary objection and strike out the application and plaint. I direct that the 3rd defendant (CAK) to continue with the process it had commenced in respect of the complaint touching on the complaint herein and deal with it as per the law provided,” the Judge said. He directed the competition watchdog to conclude investigations within 120 days.

According to the judge, CAK has the expertise and powers to undertake full and professional investigations. He said the evidence gathered will enable the court, on appeal, to make an informed decision unlike where a party directly heads to court as a first point of call.

“The reason why the doctrine of exhaustion is held in deference is because of the right to access to justice. First, it promotes alternative dispute resolution mechanisms. Secondly, it reduces the litigation in our courts and thirdly it affords the parties an additional layer of forum where the parties can air their grievances.

That expands the right to access to justice,” Justice Mabeya said.

Six beer distributors had accused EABL of buying bottles, which have a universal shape and embossing them with their unique logos with a view of limiting production and market access by other beer makers, who use the same shape of containers for their products.

Mr Alexander Mugo, Jacob Wamiti, Phasty Wanjitu Wachira, Samuel Kamau, Catherine Wanjiru and Herman Mwaura said they had invested millions of shillings to set up the distribution business and acquiring trade licences.

While saying it was their only source of income, the distributors accused EABL and KBL of engaging in acts aimed at phasing Keroche out of the market.

They said the fight between the two beer makers has interfered with the flow and return of beer bottles from companies who use the 500ml brown euro bottle.

They also accused EABL of using police officers to harass, intimidate and arrest their workers for selling Keroche’s beer in bottles they termed as universal shape thereby causing them losses.

It was their argument that the conduct is an infringement of principles of a free and competitive market economy.

The two companies have been at loggerheads over use of euro beer bottles and argue they should not be barred from collecting those engraved with EABL mark, from the market. Another case over the beer bottles is pending before the High Court.

In January 2019, the High Court allowed EABL to collect only its branded beer bottles from the market, pending the determination of the case.

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