How Diageo Escaped COMESA's Maximum Penalty
British drinks giant Diageo avoided the maximum penalty for anti-competitive practices by taking partial corrective actions before the regional competition watchdog launched its investigations.
The COMESA Competition Commission(CCC) penalized the beverage firm $150,000 (Ksh19.3 million) less of the maximum settlement after it stopped resale price maintenance a little while before investigations commenced.
Ultimately, Diageo which operates in several COMESA member states, including Kenya, Uganda, Zambia, Zimbabwe, Ethiopia, Rwanda, Mauritius, Seychelles, and Eswatini was slapped with a $750,000 (Ksh96.6 million) penalty.
The penalty concludes a four-year investigation by the CCC into anti-competitive allegations against Diageo including resale price maintenance, single branding, and territorial restrictions.
“As far as the Commission was concerned, even if Diageo had stopped one of these practices, it still broke the law and damaged the market at one point,” CCC chief executive Willard Mwemba told journalist in Nairobi.
The investigations, which began in June 2021, centered on the brewer’s distribution agreements and potential anti-competitive practices to determine whether any violations of COMESA’s competition rules had occurred.
At the heart of the investigation were Diageo’s distribution agreements, which the regional watchdog found included clauses that restricted market access and cross-border trade within the bloc.
These anti-competitive practices –single branding, resale price maintenance, and territorial restrictions— limit a consumer’s options on what product to go for, essentially restricting fair competition in the COMESA trade bloc.
Speaking at the 3rd annual CCC press conference, Dr. Mwemba highlighted the widespread prevalence the anti-competitive practice within the beer sector, noting that it has prompted the Commission to take a proactive stance in identifying and stopping offenders.
“Each of them is partitioning and carving out a niche for itself in the common market at the expense that amounts to market allocation or cartel conduct to the detriment of consumers,” he said.
In May 2025, following discussions between the Commission and Diageo, particularly around its operations in Uganda, both parties entered into commitment negotiations.
These talks culminated in a Commitment Agreement where Diageo committed to terminating certain distribution arrangements in Eswatini and Zambia, and to amending its contracts in Uganda to remove clauses that restricted competition.
The CCC has also penalized Dutch brewer Heineken $900,000 (Ksh116.2 million) being the maximum penalty over anti-competitive conduct in the COMESA Region.
Unlike Diageo, Heineken, which operates in Burundi, DRC, Egypt, Ethiopia, Rwanda, and Tunisia, failed to cooperate fully during investigations, only stepping up under pressure, earning it the maximum penalty.
ligadwah@businessdayafrica.org