ZANZIBAR – The High Court in Zanzibar has invalidated a crucial provision of the Liquor Control Act (LCA) that restricted the number of companies permitted to import liquor.
Judge George J. Kazi, presiding over the case brought by Quality Meat and Beverage Supplies (QMB), declared Section 33(1) of the LCA “inoperative” and “a nullity in law,” ruling it violated fundamental rights enshrined in the Zanzibar Constitution.
The contentious provision limited import permits to just three Zanzibari-owned businesses, hindering competition and stifling opportunities for new entrants in the liquor import market.
QMB challenged the denial of their import license under this restriction, leading to the landmark court ruling.
Judge Kazi emphasized that the Constitution safeguards citizens’ rights to pursue business ventures for their livelihood, highlighting the discriminatory nature of Section 33(1) in limiting opportunities.
He underscored that both the Zanzibar Constitution and the Fair Competition and Consumer Protection Act (FCFCPA) prohibit laws that discourage competition or hinder new market entrants.
He concluded that any legislation containing provisions contradicting the FCCPA “will not only lack a force of law but will also contravene section 10 (d) of the constitution.”
Furthermore, the judge questioned the government’s justification for the restriction, noting the absence of evidence supporting claims of excessive liquor imports.
He pointed out the lack of regulations to control the quantity of liquor imported by the three licensed entities, raising doubts about the necessity of the limitation.
“Is there excessive liquor importation in Zanzibar that is beyond the market demand? Does the law impose any restriction against the three licensed importers on the quantity of liquor to be imported?” he said.
The court’s decision compels the Zanzibar Liquor Control Board (ZLCB) to grant QMB their previously denied license and return any seized containers and proceeds from sales.
This ruling marks a victory for QMB and signals a shift towards increased competition in Zanzibar’s liquor import market.
Moreover, the decision sets a precedent for challenging anti-competitive laws and upholding business freedoms.
It comes at a critical time as other importers, including ZMMI, One Stop, and Scotch Store, face license denials, resulting in significant cargo holdings at the port of Malindi.
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