The Competition Authority of Kenya (CAK) has denied Kenyan billionaire Humphrey Kariuki the green light to exclusively import and distribute 214 premium wines and spirits brands including Bacardi-Martini labels.
According to the authority, granting permission to the tycoon would facilitated the establishment of a wines and spirits monopoly by locking out rivals at the expense of customers.
The decision has effectively halted a series of planned exclusive distribution agreements of wines and spirits between WOW Beverages and various alcohol manufacturers.
“The CAK has rejected an exemption application by WOW Beverages in which the firm was seeking to enter into exclusive distributorship agreements with seven international suppliers,” the regulator said in a statement. “The Authority is of the opinion that parallel imports, through legal channels, are likely to bring more benefits to Kenyan consumers, including the enhancement of intra-brand competition which often leads to lower prices.”
WOW Beverages told the regulator that its exclusive deals were necessary to protect its investments besides guaranteeing the products’ quality in the local market.
The CAK, however, ruled that the company did not prove the claims.
Had the application been granted, WOW Beverages would have emerged with the largest product variety, beating its rivals including East African Breweries (EABL), which has tens of brands.
Earlier in the year, WOW Beverages had signed an exclusive deal to import and distribute 214 premium wine and spirits brands including Bacardi-Martini labels.
The agreement with seven liquor manufacturers and suppliers would have given Wow the largest product variety, beating its rivals including East African Breweries (EABL) which has tens of brands.
The potential market concentration caused Wow to apply to the Competition Authority of Kenya (CAK) seeking approval for its exclusive distribution deal.