TANZANIA: SABMiller in legal battle with Diageo's East African Breweries
SABMiller confirmed to just-drinks today (27 July) that it has filed for legal action in the UK to block a deal between East African Breweries (EABL) and Serengeti Breweries Ltd, Tanzania's second largest brewer.
Kenya-based EABL already owns a 20% stake in Tanzania Breweries, which is the country's largest brewer and is 52.83% owned by SABMiller.
But, Diageo announced today that EABL has signed a deal to acquire a "substantial interest" in Serengeti Breweries for an undisclosed fee. EABL intends to terminate its distribution and brewing agreement with Tanzania Breweries, Diageo said.
SABMiller accused EABL of a "fundamental breach" of contract, "having negotiated a competitive deal while remaining as a shareholder of Tanzania Breweries and a member of [it's] board".
SABMiller added: "The relationship between EABL and TBL has been in place for seven years and during that period TBL has successfully grown the EABL brand portfolio in Tanzania at a compound rate of 12.7 %. TBL continues to perform its contractual obligations in relation to the EABL brand portfolio as usual."
An SABMiller spokesperson declined to comment further.
Diageo said of the deal: "Serengeti will form an integral part of EABL's East African supply footprint providing additional capacity to Kenya and Uganda."
The group said Serengeti, which has gross assets worth around GBP38m, has a 17% share of the Tanzanian beer market and has grown this by 10% in the last three years. Premium priced Serengeti Lager constitutes 85% of the group's volume sales.
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