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EABL under probe for unfair trade practices over bottles

By Wainaina Wambu and Moses Njagih | November 20th 2020
A worker inspects beer on the production line at the East African Breweries factory in Ruaraka, Nairobi. [File]

The Competition Authority of Kenya (CAK) has revealed that East African Breweries Limited (EABL) is being probed for hindering fair trade.

The authority told the Senate Committee on Trade that it was investigating if the move by Kenya’s largest brewer to engrave beer bottles had amounted to an abuse of dominance.

The committee launched a probe following a statement sought by Nominated Senator Petronilla Were, who accused the brewer of “monopolistic tendencies.”

However, EABL Group Corporate Relations Director Eric Kiniti said the Senate was yet to reach out to them and declined to comment on the statement.

“They haven’t reached out to us yet. We’ve not been asked to respond; we will only comment once we get any communication,” he told The Standard.

The Senate wanted an explanation on why EABL was engraving the universal Euro brown design bottle with its initials, hence limiting their access by competitors.

“Explain whether any beer company in Kenya has the right to claim ownership of the euro brown design beer bottles considering that the bottle design existed many years before EABL and these competitors ever entered the Kenyan market,” said the statement request.

It further demanded to know measures put in place by the government to ensure that EABL does not “continue abusing” its dominant position in the market.

In 2014, CAK investigated the alcoholic beverages sector following complaints against EABL.

The company’s subsidiary, Kenya Breweries Ltd, was found to enjoy a dominant position in the production of beer with about 90 per cent market share based on sales revenues.

In response to the Senate, CAK Director-General Wang’ombe Kariuki, however, noted that investigations into the conduct of EABL of engraving beer bottles had been delayed owing to an ongoing court case on the matter.

“As such, before the conclusion of the investigations, it is speculative to say whether or not EABL’s conduct amounts to a contravention of the Act,” he said.

He further said CAK needed to collect more information on sources of beer bottles and whether they had been patented by manufacturers.

Kariuki, however, noted that Keroche Breweries was not “forthcoming” on information requests for samples of the beer bottles in contention to fast-track investigations.

“This may slow down investigation processes given that they are the key interested party,” he said.

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