A beer distribution row between Kenya Breweries Limited and one of its distributors, Bia Tosha Distributors Limited, intensified yesterday after the court barred the brewer from interfering with the routes allocated to two other suppliers.
Justice Alfred Mabeya barred the brewer from suspending or interfering with the distribution regions currently owned by Ngong Matonyok Wholesalers Limited and Manara Limited.
Some of the regions that the judge said should not be interfered with were returned to Bia Tosha by the Supreme Court last week.
The interim order by Justice Mabeya came five days after the Supreme Court allowed Bia Tosha Distributors to regain control of 22 liquor distribution routes, which had been repossessed by KBL in 2016.
The Supreme Court on Friday reversed a decision of the Court of Appeal to lift High Court orders that had preserved the distribution routes exclusively to Bia Tosha pending the determination of a petition involving a partnership dispute.
However, yesterday Ngong Matonyok Wholesalers Limited and Manara Limited claimed in court that they also have distribution partnership agreements with KBL.
The agreements cover some of the routes that were recovered by Bia Tosha.
Court papers indicate that the two distributors have a five-year distribution agreement dated April 30, 2019, with KBL and a three-year agreement dated June 1, 2022, with UDV (Kenya) Limited.
Under the agreements, Ngong Matonyok Wholesalers Limited is entitled to market, resell and distribute the KBL’s products within Kiserian, Ngong, Wangige, Magadi, and Dagoretti among others.
Manara Limited is entitled to market, resell and distribute KBL’s products within Kitengela, Kajiado, Athi River, Machakos, Bassil, Namanga, and Maili Tisa.
Exclusive routes
In the case of Bia Tosha, the 22 exclusive routes that Bia Tosha regained control of after the Supreme Court judgment include Namanga, Bissil, Kajiado, Kitengela, Athi River, Industrial Area, South B, and Nairobi West.
Others are Kenyatta, Langata, Rongai, Kiserian, Magadi, Upperhill, Ngong Road, Hurlingham, Kawangware, Satellite, Dagoretti, UDV A, UDV B, and UDV C.
Opposing repossession of the regions, Ngong Matonyok Wholesalers Limited and Manara Limited yesterday said they will suffer irreparable loss, harm, and damage should the KBL grant a third party exclusive distributorship rights over the territories covered by their agreements.
They told the court that between February 18 and 20, 2023 KBL issued correspondence indicating an imminent plan to repudiate its agreements with the two distributors.
In their case at the High Court challenging KBL’s from giving out the routes, Ngong Matonyok Wholesalers Limited and Manara Limited claim that have, over the years, made multi-billion investments and entered into multi-billion contracts with multiple third parties in reliance of the agreements they have with KBL.
Ngong Matonyok Wholesalers Limited has been a distributor of KBL products for 55 years (since 1968) while Manara Limited has been a distributor for seven years (since 2016).
Mr Joseph William Nduva Muli, a director at Manara Limited, in his affidavit stated that the imminent repudiation plan by KBL will have the ‘domino effect’ of triggering breaches of countless contracts between the Plaintiffs and numerous third parties.
The said contracts include contracts relating to leases, hire purchase, and purchase of distributorship trucks and other motor vehicles and leases of real property, warehouses, and storage facilities.
Others are contracts relating to loans, guarantees, overdrafts, and other credit facilities with various financial institutions and contracts relating to the employment of various cadres of staff.
He added that repudiation of the agreements will “expose the two distributors (and the entire alcoholic beverages industry in Kenya) to arising from the third-party contract breaches”.
Justice Mabeya directed the two distributors to furnish KBL with the court papers within 10 days so that it can file its response. The case will be mentioned on March 6, 2023, for directions. BY DAILY NATION