Why Uganda Breweries parent company Diageo was fined $750,000

 

BY PAUL TENTENA

Diageo, the majority shareholders of East African Breweries Ltd, the parent company of Uganda Breweries Ltd, have been fined $750,000 by the COMESA Competition Commission (CCC).

The COMESA CC, said in Nairobi that it concluded its investigation into Diageo over allegations of market allocation and anti-competitive practices within the Common Market for Eastern and Southern African countries whose membership is 21 countries.

Market allocation refers to agreements signed between competitors to divide markets, customers, or territories reducing competition and increasing prices while anticompetitive practices are business practices that restrict or distort competition, harming consumers and the economy. These practices may be price fixing, bid rigging, market sharing, abuse of dominance and exclusive agreements.

According to Dr. Willard Mwemba, the COMESA Competition Commission Chief Executive Officer, they initiated the investigation on 21 June 2021 and focused on Diageo’s distribution agreements across several COMESA Member States, including Eswatini, Ethiopia, Kenya, Mauritius, Rwanda, Seychelles, Uganda, Zambia, and Zimbabwe.

They examined concerns such as resale price maintenance, single branding, and territorial restrictions.

“Extensive engagement with Diageo culminated in a Commitment Agreement, endorsed by the Committee Responsible for Initial Determinations on 23 September 2025.

“Under the agreement, Diageo terminated certain distribution arrangements in Eswatini and Zambia and amended its Ugandan contracts to eliminate anti-competitive clauses,” Dr. Mwemba told reporters in Nairobi.

He added that Diageo also agreed to pay an amount of $750,000 as a settlement for concerns related to territorial restrictions, single branding, and resale price maintenance.

In a related development, the COMESA Competition Commission also concluded its investigation into Heineken Holding N.V. over allegations of anti-competitive conduct within the COMESA Region.

The investigation focused on potential market allocation through Heineken’s distribution agreements and arrangements with competitors, in violation of Article 16(1).

Operating in several Member States, including Burundi, Democratic Republic of Congo, Egypt, Ethiopia, Rwanda, and Tunisia, Heineken was found to have engaged in practices such as resale price maintenance, single branding, and territorial restrictions.

Under the agreement, Heineken implemented corrective measures, including revising its distribution agreements across the Common Market and paying a settlement amount or fine of $900,000.

The COMESA Competition Commission, in collaboration with CUTS International, is also actively advocating for the formal recognition of World Competition Day (WCD) by the United Nations.

Observed annually on 5th December, the World Competition Day has not yet been officially designated as a United Nations Day.

Formal recognition would foster international cooperation in addressing anti-competitive practices, promote inclusive economic policies, strengthen consumer protection, and enhance market access for small and medium-sized enterprises (SMEs).

It would also reinforce the role of competition law in tackling global challenges such as economic inequality, climate change, public health crises, and the digital divide.