E-Malt.com News article: Tanzania: Tanzania Breweries could end up paying damages to Serengeti Breweries over sabotage accusations - report

Tanzania Breweries Ltd, the country’s largest brewer, could end up paying millions of dollars in damages to its rival Serengeti Breweries Ltd over widely publicised sabotage accusations in the battle for customers, The East African reported on August, 28.

TBL, which commands a 70 per cent share of the market and is a subsidiary of the world’s second biggest brewer SABMiller, is accused of anti-competitive branding agreements with outlet owners and removing SBL’s posters and signage in the market. The two brewers have taken their competition wars to the Fair Competition Tribunal of Tanzania (FCT).

In September 2009, SBL lodged a complaint at the Fair Competition Commission (FCC) against TBL for allegedly restricting competition in the beer industry.

Following the hearing, the Commission penalised TBL and ordered it to pay a fine of five per cent, refrain from removing SBL poster materials at the outlets and directed that all branding agreements between TBL and outlet owners be declared null and void.
FCT has already started proceedings against the company for anti-competitive behaviour, and the penalty could be worth up to five per cent of TBL’s turnover for the year of its latest audited accounts.

Going by the results for the year ending March 2011, when TBL’s turnover stood at $455 million, the firm could pay up to $22.7 million in damages.

TBL has subsequently filed an appeal at the FCT on two grounds; that it has not been given a reasonable opportunity to be heard and that FCC failed to conduct its investigation fairly.

Battles between manufacturers and distributors of consumer goods has been on the rise in East Africa’s second biggest economy, reflecting the fierce competition for customers.

On December 13, 2010, upon an application made by TBL, the tribunal granted the appellant leave to add FCC as a respondent in Appeal No. 4 of 2010 and accordingly an amended memorandum of appeal was duly lodged in the tribunal on December 17, 2010.

Upon hearing the matter, chairperson of the tribunal Justice Razzia Sheikh, noted that FCC had objected to Appeal No. 4 on the grounds that the amended memorandum of appeal was bad in law for non-compliance with the provisions of the Fair Competition Act No. 8 of 2003, the fair Competition Commission Procedure Rules, 2010 and the FCT Rules, 2006.

According to Justice Sheikh, the appeal was also sub-judice as there were other proceedings in respect of the same decision before the FCT and that the purported appeal was bad in law for mis-joinder of parties and that the purported order relied on in amending the memorandum of appeal contravened the principles of natural justice.

Delivering judgment at the FCT last week, Justice Sheikh overruled and dismissed the appeal with costs, which TBL will now have to pay.

The FCT ruling said that the Appeal No. 4 was incompetent due to the failure by the TBL to file a notice of appeal in respect of FCC, who should have been the second respondent in the appeal as required in Rule 7(1), (4) and (5) of the FCT Rules and that in the notice of appeal filed by TBL on May 2010 and which was annexed to the memorandum of appeal, FCC did not appear as a respondent.


31 August, 2011