Diageo to Pay KSh 96.9 Million in COMESA Competition Settlement

Published By The Statesman For The Statesman Digital
2 hours ago

Global beverage firm Diageo has agreed to pay $750,000 (Sh96.9 million) to settle a four-year competition investigation by the COMESA Competition Commission (CCC) over alleged restrictive business practices across several East and Southern African markets.

The settlement follows a probe launched in June 2021 into allegations that Diageo’s distribution agreements in Eswatini, Seychelles, Uganda, and Zambia breached Article 16(1) of the COMESA Competition Regulations.

The Commission’s inquiry centered on practices such as market allocation, price fixing, and single-branding restrictions that allegedly limited trade within the regional bloc.

According to the Commission, Diageo’s agreements included clauses restricting distributors from operating beyond allocated territories, as well as provisions against selling to customers who might re-export products.

The investigation also flagged instances of minimum resale price maintenance in Seychelles and Uganda, as well as single-branding obligations in Uganda, which the regulator said constrained competition.

“However, restrictions on passive sales are a very serious offence and would always be considered a breach of the Regulations because they are an affront to the overriding Treaty objective of the single market integration.”

To resolve the case without admitting liability, Diageo entered into commitment negotiations in May 2025, agreeing to remove restrictive clauses within 180 days.

The brewer also pledged to permit passive sales across the COMESA region and conduct annual competition compliance training for staff and management for three years.

As part of the financial settlement, Diageo will pay $300,000 (Sh39.3 million) for concerns linked to territorial and price restrictions, and $150,000 (Sh19.65 million) for single-branding issues. The Commission will monitor compliance for five years.

“NOW THEREFORE, the CID hereby confirms the Commitment Agreement between Diageo and the Commission.”