KENYA – Kenya Wine Agencies Ltd has been granted exemption, allowing it to be the sole distributor of Distell, the South African wine and spirits manufacturer.
In a Gazette notice published last Friday, the Competition Authority of Kenya approved the acquisition of 26 per cent shares in Kwal by the South African wine maker but outlined tough conditions for the deal.
The regulator said Kwal “shall not sell or distribute products originating from South Africa or elsewhere which directly or indirectly compete (as far as prices, category or presentation is concerned).
Distell has also been given the leeway by the authority to determine the prices of all products to be supplied by Kwal in the region by June 1 of every year.
The sale of the government stake in Kwal was part of a prolonged privatisation journey that saw Distell acquire 26 per cent shares at an estimated Sh860 million.
Despite approving the share sale, the authority said it would consider views of any interested parties regarding Kwal’s share sale, exclusive bottling, manufacturing and distribution of Distell products in the East African region.
The agreement is meant to secure the future of Kwal, which has been in doubt due to increased competition.
In July this year, the Privatisation Commission committed Kwal and Distell to an “indefinite long-term supply and distribution agreement” with the minimum lock in period being five years after allowing the share sale to proceed.
Plans to sell State shares in Kwal were first revealed in 2011 when the government also lined up other firms it has control in namely Nzoia, Chemilil, Muhoroni, Miwani and Sony sugar, which are laden with debt.
The 26 per cent share sale depressed the government’s stake to 46.65 per cent, which is expected to be disposed of by 2018.
Some of the popular brands that Distell markets in the local market are Amarula and Viceroy.