A long-running commercial dispute in Kenya’s beer distribution market has resurfaced after a local distributor moved to court to stop Diageo Plc from selling its majority stake in East African Breweries Limited (EABL) to Japan’s Asahi Group.
Bia Tosha Distributors has filed an urgent application before the High Court seeking to block the proposed transaction. The deal is valued at about $2.3 billion (Sh296.7 billion). The distributor argues that Diageo’s exit would undermine court cases that have remained active for nearly a decade.
Dispute Over Distribution Rights
At the centre of the case is whether Bia Tosha held exclusive distribution rights in several territories, including Nairobi. The distributor claims companies within the Diageo group unlawfully repossessed its territories.
It also alleges that the firms failed to refund goodwill payments. According to Bia Tosha, these actions breached constitutional protections and competition law.
The distributor wants the court to bar Diageo from selling, transferring, or disposing of its shares in EABL. The request also covers Kenyan subsidiaries, including Kenya Breweries Limited and UDV (Kenya) Limited. The restriction would remain in place until a constitutional petition filed in 2016 is fully determined.
Risk to Court Authority
Bia Tosha filed the application under a certificate of urgency. It argues that Diageo’s proposed sale to Asahi Group Holdings Limited, a Tokyo-based firm, would weaken the authority of Kenyan courts.
According to the distributor, Diageo’s EABL shares represent its only known asset and security within Kenya. Once sold, enforcing any future court orders would become difficult.
“This court’s jurisdiction and authority are at risk of being frustrated if the intended share sale proceeds,” the distributor’s advocate states in court papers. The advocate warns that Diageo’s exit would render the ongoing litigation ineffective.
Supreme Court Orders Cited
The distributor relies on earlier court decisions to support its position. In February 2023, the Supreme Court reinstated conservatory orders first issued by the High Court in June 2016.
Those orders preserved the status quo pending the hearing of the constitutional petition. The apex court also faulted lower courts for failing to resolve the dispute conclusively and directed that the matter be handled on priority.
Allegations of Disobedience
Despite those rulings, Bia Tosha claims Diageo entities have repeatedly ignored court orders. In an affidavit sworn by managing director Anne-Marie Burugu, the distributor accuses the companies of continued disregard of orders issued by the High Court, the Court of Appeal, and the Supreme Court.
Based on this history, Bia Tosha argues that the planned sale is not a normal commercial deal. Instead, it views the transaction as a deliberate attempt to defeat the court process.
Timing and Regulatory Concerns
The application also questions the timing of the transaction. Bia Tosha claims Diageo announced the deal during the Christmas holiday period to fast-track regulatory approvals.
The distributor warns that approvals under capital markets rules could be granted within days. This would permanently change the ownership structure before the courts intervene.
To prevent this, Bia Tosha is seeking orders in rem. These orders would bind the disputed shares regardless of any agreements Diageo signs after the case filing.
Wider Public Interest Issues
Beyond the commercial dispute, the distributor frames the case as a matter of public interest. It argues that the outcome will test the authority of Kenyan courts over multinational corporations.
“There is no other effective means by which this court can compel obedience other than through prohibition of the sale,” the court papers state.
What the Case Means for Investors
For Diageo, the proposed sale to Asahi would end decades of control over EABL. The brewer has long considered EABL one of its most valuable African assets.
For investors and regulators, the case introduces uncertainty into one of Kenya’s largest corporate transactions in recent history. The High Court has yet to hear the application.
The respondents—Kenya Breweries Limited, UDV (Kenya) Limited, EABL, and Diageo Plc—had not filed their responses at the time of publication. If the court grants the orders sought, Diageo’s exit from EABL would face a temporary freeze. The case is scheduled for a hearing on January 9, 2026.
