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EABL, Keroche court fight over bottles deepens

A dispute between East African Breweries Limited
A dispute between East African Breweries Limited (EABL) and Keroche Breweries over beer bottles has deepened. FILE PHOTO | NMG 

A dispute between East African Breweries Limited (EABL) and Keroche Breweries over beer bottles deepened Tuesday, with distributors affiliated to the Naivasha-based brewer accusing their main rival of working to drive them out of business.

The six distributors say EABL has been mopping up the brown beer bottles with the aim of driving Keroche out of the market.

They accuse the Nairobi Securities Exchange-listed brewer of embossing beer bottles that have the universal shape with its unique EABL initials to prevent rivals from using them.

Keroche’s Summit beer bottles are similar to those of EABL’s White Cap and Balozi brands, making it easier for both brewers to interchange the bottles.

Tuesday, High Court Judge Grace Nzioka directed the two beer firms to cease the media advertisement war over ownership of the bottles, pending the hearing of the case this Friday.

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EABL had on December 20 issued a media notice informing the public of the ownership of bottles and bottle crates that are engraved with the EABL trademark, arguing that the advert was based on an earlier court order stopping Keroche from using its products.

Keroche followed up on December 24 with a notice that accused Diageo’s EABL of using its dominance to stifle competition and drive it out of business. In documents filed in court, the six Keroche distributors argue that allowing Kenya Breweries Limited (KBL) and EABL exclusive use of the brown bottles is irrational, unreasonable, an abuse of intellectual property and misuse of dominance.

But EABL, through lawyer Kamau Karori of Iseme Kamau and Advocates, says that the six distributors were Keroche proxies and filed their application to derail another suit pending in the High Court, which is hearing a similar row over bottles.

The other High Court had issued orders stopping Keroche from using bottles and crates engraved with the EABL logo.

The six distributors –Alexander Mugo, Jacob Wamiti, Phasty Wachira, Samuel Kamau, Catherine Wanjiru and Herman Mwaura—are in the latest suit seeking court orders barring EABL and KBL and their agents from embossing beer bottles with any exclusive mark or unique initials.

In response, EABL said it purchases bottles engraved with its logos from a leading glass maker in Kenya to package over 10 beer brands. The embossment is done at the point of manufacture by the glass maker and with a lifespan of five years during which the bottles are returnable for reuse, added EABL.

EABL buys the bottles from Central Glass Industries, which was until 2015 one of its subsidiaries before selling the bottle-making unit to South Africa’s Consol Glass Africa Proprietary.

The distributors reckon that EABL has been buying and offering goodies to beer consumers and traders for returned bottles, terming the move an unfair trading practice.

Owned by the Karanja family, Keroche started by making spirits and wines in 1997 before diversifying into beer in 2008, placing it in a head- to- head battlewith the world’s biggest alcoholic drinks group — Britain’s Diageo Plc, which is majority owner of EABL.

The owners of Keroche Breweries, Tabitha Karanja and her husband Joseph Karanja, are also fighting a criminal court suit where they have been accused of evading taxes totalling Sh14.5 billion.

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