The Competition Authority of Kenya has become the target of intense criticism after attaching conditions to Diageo’s planned Sh388.2 billion sale of its 65% stake in East African Breweries Limited to Japan’s Asahi Group Holdings. EABL and its new buyer have painted themselves as victims of an overreaching regulator, but a careful review of the facts suggests the authority’s demands are not only reasonable but necessary.
What the Regulator Demanded
CAK has required EABL to set aside Sh15.5 billion—approximately 4% of the deal’s value—as a reserve fund to cover outstanding third-party claims that would remain unresolved after Diageo departs.
Additionally, the regulator wants at least 20% of retail cooler space reserved for rival brands, directly challenging EABL’s long-standing monopoly over refrigeration infrastructure across the country.
While EABL and Diageo have dismissed these requirements as baseless, their track record tells a very different story.
A History of Market Control
EABL commands roughly 90% of Kenya’s beer market—a dominance that didn’t emerge by accident. CAK’s own merger review revealed that the company’s distribution network, exclusive territories, product placement strategies, and company-owned refrigeration equipment systematically shut out competitors from major retail outlets.
The refrigeration condition isn’t a punishment; it’s a modest corrective measure in a market where the dominant player has long dictated who gets shelf space.
The Bia Tosha Saga
The most compelling evidence of EABL’s questionable practices is its decade-long legal battle with Bia Tosha Distributors.
The distributor paid approximately Sh38 million in goodwill for exclusive distribution rights across prime Nairobi routes, only to have Kenya Breweries Limited later reclaim those territories.
The dispute escalated through the courts, reaching the Supreme Court, which in 2023 reinstated orders protecting Bia Tosha’s territory.
The distributor’s claim for lost earnings now approaches Sh8 billion, with contempt findings already recorded against EABL executives.
Although the High Court dismissed Bia Tosha’s attempt to block the Diageo-Asahi deal in April 2026, that ruling didn’t resolve the underlying claims—it only declined to halt a share transfer over a commercial dispute.
Other Pending Claims
JILK Construction is pursuing roughly Sh2.45 billion related to civil works on EABL’s Kisumu brewery project from 2017-2018. The arbitration has been complicated by conflict of interest allegations, claims of inflated demands, and separate constitutional petitions alleging workplace harassment.
In April 2026, Kenya Wine Agencies Limited (majority-owned by Heineken) filed a complaint with CAK accusing EABL of abusing its dominant market position through exclusive agreements that lock in distributors and enable price manipulation.
Regional Precedent
The COMESA Competition Commission concluded a four-year investigation into Diageo’s distribution practices in Uganda, Eswatini, and Zambia, finding violations including minimum resale price clauses, single-branding restrictions, and territorial market allocation.
Diageo settled for $750,000 in September 2025 and agreed to remove the restrictive clauses.
This finding came less than three months before Diageo announced the Asahi sale. CAK’s conditions aren’t novel they address conduct already documented by a regional regulator.
Minority Shareholders Left Behind
Perhaps more troubling than the competition concerns is Diageo’s treatment of minority shareholders.
In October 2022, Diageo launched a partial tender offer at Sh192 per share to increase its EABL stake to 65%.
Just fourteen months later, it negotiated to sell that same stake to Asahi at Sh590.51 per share—a 134% premium.
When Diageo exited Ghana, Nigeria, and Seychelles, minority shareholders received mandatory buyout offers. Only in Kenya did Asahi secure exemptions from the mandatory offer requirement.
The 35% of EABL held by ordinary Kenyan investors will receive no premium—they’re being left behind.Nairobi shareholder Christine Irungu’s petition succeeded in June 2026 where others had failed, securing conservatory orders freezing the entire transaction pending a full hearing.
The Bottom Line
EABL is a 104-year-old company with 90% market dominance. It has been found by a regional regulator to have run restrictive distribution practices.
It faces unresolved claims from Bia Tosha totaling Sh8 billion. It owes JILK Construction around Sh2.45 billion. It was called out by Heineken’s subsidiary. And it structured its shareholder premium to benefit only the outgoing and incoming multinationals.
CAK initially requested 10% of the transaction value before settling on 4% after reviewing the scale of actual claims. This isn’t a regulator manufacturing a crisis—it’s one doing its homework.
Whether the conditions survive litigation remains uncertain. What shouldn’t be debated is EABL’s claim of victimhood.
The record speaks for itself.
