Kenyan liquor mogul Tabitha Karanja’s Keroche Breweries is ready to accept the Competitions Authority of Kenya’s (CAK) decision in its protracted bottle war with East African Breweries Ltd. (EABL).
The Star quoted Karanja saying: “We welcome the decision by the High Court to have our case resolved by the Competitions Authority in Kenya within four months.”
A few days ago, Alfred Mabeya, the Meru High Court presiding judge, referred the case against EABL to the CAK with the order to complete its investigation within 120 days.
The court will make a decision concerning the matter after the CAK concludes.
“Accordingly, I uphold the preliminary objection and strike out the application and plaint. I direct that the third 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,” Justice Mabeya ruled, as reported by Kahawa Tungu.
The decision comes after a months-long legal battle over the use of 500-milliliter brown beer bottles imported into the Kenyan market.
Having an approximate 70-percent share of the market, EABL embosses its logo on the imported bottles it purchases, while Keroche does not. The bottles have universal shapes and color and were not specially manufactured for one person. Technically, EABL’s branding gives it some level of rights to its bottles, for which it has no legal patent.
In fact, CIPIT reported that EABL placed an advertisement informing the public of ownership over bottles and crates embossed with its trademark. The company stated that it would institute legal action against anyone found using the bottles. Seemingly in a rejoinder, Keroche issued a notice, stating that the exclusive use of the brown bottles was irrational, unreasonable, an abuse of intellectual property (of the manufacturer), and misuse of dominance.
The move has given EABL a market advantage, as it is able to pick up Keroche’s bottles after they have been used, emboss them and reuse them, leaving the local brewer with a limited amount of bottles for production, while flooding the market with its products.
Therefore, in 2020, Keroche opted to open a legal case against EABL, Business Daily reported, arguing that the imported bottles should be available for everyone’s use.
Keroche and other distributors claimed that EABL’s logo limits their market access and production. Keroche believes the EABL is employing the strategy to lock out investors and other breweries that use the 500-milliliter brown bottle from the liquor business.
Keroche is a strong competitor for the British-controlled EABL, holding a 29-percent share of Kenya’s alcoholic beverage market. In April, it announced that its new expansion strategy could see the Kenya Revenue Authority generate over Ksh1 billion ($92.7 million) annually.