East African Breweries Limited (EABL) Director and its parent company Diageo are facing multi-billion shilling fines after being accused of violating a Supreme Court order regarding a beer supply contract.
Bia Tosha Distributors Ltd, the brewer’s former supplier, wants the directors fined the equivalent of 20% of EABL’s sales, or Sh39 billion, for refusing to return beer distribution routes in Nairobi, Machakos, and Kajiado.
Following a lengthy legal battle that began in 2016, the Supreme Court last month ordered EABL to reinstate Bia Tosha on the contested routes. However,Bia Tosha told the Supreme Court that EABL had ‘sponsored’ the current distributors to sue in the High Court in order to thwart the implementation of the apex court’s order.
Ms Burugu also wants the country’s highest court to compensate Bia Tosha for losses incurred during the seven years EABL kept it out of the beer distribution business.
The long-running legal battle began in 2016 when Bia Tosha accused Kenya Breweries Ltd (KBL) of breaching the distributorship contract they signed in 2006.
The distributor initially supplied alcohol in 14 areas before expanding the territory to 22 larger areas that included parts of the Athi River, Kitengela, and Kawangware.
EABL then reclaimed some routes, including Baba Dogo, Dandora, and Karobangi North, allowing Bia Tosha to focus on the larger routes.