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BusinessMeta levels charges against Heineken

Meta levels charges against Heineken

Brewery giants Meta Abo and Heineken came to the spotlight over the week as the former accused the latter of unfair trade practices and disrupting its operations in the Ethiopian market.

The suit, filed with the tribunal of the Ethiopian Trade Practices and Consumer Protection Authority, alleges that Heineken intentionally hoarded bottles and crates in order to sabotage Meta’s competitiveness.

The case was originally filed at the tribunal last week.

According to the suit, Meta argued that Heineken was engaged in hoarding activity in such lucrative markets as Addis Ababa and the Southern Regional State. The hoarding also took place in Hawassa, Yirga Cheffe, Kibre Mengest and Sheko towns.

Heineken has been engaged in hoarding of Meta bottles and crates between October 2016 and April 2017, reads the suit filed by Meta.

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Further, it is stated in the suit that Meta suffered a loss to the tune of nine million birr and lost its competitiveness in the affected areas.

In its suit, Meta demanded that Heineken desist from its acts of sabotage, and further demanded compensation as well as legal costs.

In order to back its argument, Meta listed 20 people as its witnesses that would provide evidence of hoarding perpetrated by the defendant. Moreover, Meta requested that a reference be made to an earlier ruling in the Southern Nation, Nationalities and Peoples Regional State whereby Heineken was found guilty of unfair trade practices.

The two global giants, viz. UK-based Diageo (owner of Meta) and Heineken entered the Ethiopian market following the privatization of state-owned breweries.

In this process, Heineken acquired Bedele and Harar breweries for a total of USD 163.4 million.

During the same year, Diageo purchased Meta for USD 225 million. In that very bidding process, along with Diageo, Heineken, SAB Miller and South West in a joint venture (JV), and Dashen Brewery in a JV with Duet, a London-based equity firm, had made an offer of USD 188 million, 190 million, and 171.5 million, respectively.

Currently, there are around seven breweries in Ethiopia with an annual production capacity of 12 million hectoliters.

Heineken has a production capacity of four million hectoliters owning varieties like Walia Lager, Bedele SpecialBedeleHarrarBucklerSofi MaltHeineken and recently Walia Radler.

On the other hand, the Meta Abo brand subsumes such beer varieties as Meta, Azmera, Guinness as well as non-alcoholic Malta.

According to industry analysts, BGI Ethiopia dominates the market with 38 percent. Heineken Ethiopia and Diageo follow with 30 and 15 percent shares respectively.

Heineken is expected to present its defense to the tribunal on July 27, 2017.

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