Case against Coca-Cola and Ambo Water over an illegal merger remanded

ETHIOPIA – Case by the Trade Competition & Consumer Protection Authority against bottlers of Coca-Cola and Ambo Mineral Water for an allegedly illegal merger has re-emerged, the tribunal sending the case back to the lower court for further proceedings, reported AddisFortune.

The case, dating 16 June 2017 implicated that the two companies, Ambo Mineral Water and East African Bottling Company had engaged in an illegal merger without proper notification to the authority.

After emergence of concerns that the two had participated in unfair trade practices as well as for undergoing an unlawful merger that had a negative impact on fair trade practices, the two were each ordered to pay fines of up to 5% of their annual revenues.

Though the lower court closed the case after the penalty, the higher tribunal has remanded it saying the bench did not consider some vital points during the judgement.

The judgement ruled out was said to reinforce the proclamation on trade practices and consumer protection which stipulates that any dishonest practice carried by a party that would likely harm the business interests of a competitor, shall be deemed to be an act of unfair competition, thus prohibited.

According to Egeza.com, the merger was said to occur three years ago in an arrangement whereby Ambo Mineral would join Coca Cola family as SABMiller, a major shareholder within Ambo Mineral with 51% stake.

The two which have been allegedly been exchanging workers, logo and letterheads had argued that SABCO absorbed Ambo International Holding Ltd Mauritius and East African Bottling, which effectively led to the merger of the defendants.

Though partly privatized to a company founded by the prominent businessman Tewodros Ashenafi, and SABMiller, the Ethiopian government previously held a 33% stake in Ambo Mineral water, which it later sold to Ambo International Holding Ltd for US$19.7 million.

Following a merger between SABMiller Plc, Coca-Cola Company and SABCO, claimed to swallowed Ambo International Holding Mauritius and East African Bottling, to form Coca-Cola Beverages Africa (CCBA), the prosecutors said the merger effectively led to the merger of the defendants.

However, the two companies denied the merger in a defence statement filed in July 3, 2017 which was rejected on August 23, 2017 by the presiding judge.

On January 17, 2018, the two companies appealed the decision of the lower court in pursuit to reverse the verdict and fines levied on them, and in the statement pleaded that the local companies did not make any merger just like their parent companies did globally.

According to the bottlers, there was no merger among the companies locally, the merger could be legal according to the rules and regulations of Common Market for Eastern Southern Africa (COMESA), which Ethiopia is a member of and will a bid to the principle.

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