Keroche claim unethical tactics by rivals

April 15, 2009

, NAIROBI, Kenya, Apr 15 – Keroche Breweries has claimed that the production of its beer brand ‘Summit’ has gone down by 60 percent in the last few months due to unethical practices by their competitors.

Keroche Breweries Managing Director Tabitha Karanja alleged on Wednesday that their rivals East African Breweries Limited (EABL) have been employing unfair measures such as bribing bar owners not to stock ‘Summit’, practices that they claim have affected production.

“Our production capacity was 6,000 bottles per hour so if we are only working at 40 percent it means that instead of doing 20 hours, we are doing six hours,” she said.

Mrs Karanja also complained that they were incurring heavy losses particularly in their promotion materials where although they were spending Sh10 million per month, most of the posters were being pulled down or defaced and ending up in the dumpsites.

“We have seen that if we don’t raise the alarm on what is going on in the market, then we may go the Castle Lager way,” she said in reference to the South African Brewer that had to wind up in the 1990s citing similar tactics.

EABL has however denied the allegations and maintained that its operations are founded on professional business ethics and that they observe high ethical standards within any business environment.

Speaking after appearing before the Parliamentary Committee on Finance, Planning and Trade, Mrs Karanja warned that the brewery would be forced to lay off nearly 50 percent of its employees if the practises continue.

The plant employs 260 workers.

The committee heard of the bribery claims, which she said amounted to Sh10,000 per week depending on the location of the bar, harassment of marketing and distribution staff and removal of Keroche’s advertisement materials such as posters.

“All that we have asked is a level playing field,” she stated.

Mrs Karanja added that the market, which has been a monopoly for more than 80 years, was large enough to accommodate more than two players and thus there was no need to resort to anti-competitive tactics.

She was however hopeful that the Parliamentary Committee would intervene in the matter and save her business from collapse.

“They have assured us that they will not let an indigenous company to be harassed in their own country, because if we let this happen it will discourage other local investors from putting their money in the country,” she added.

EABL is expected to appear before the same Committee on Thursday morning over the issue.

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