Distell Group, Africa’s leading producer and marketer of spirits, wines, ciders and ready-to-drinks, has lost the first round in its battle against AB InBev. The owner of the Amarula brand has accused AB InBev of breaching merger conditions laid down when the world’s largest brewer bought its rival SABMiller in 2016 in a transaction that was valued at USD 100 billion.
At that time Distell made a submission to the competition authorities, asking for conditions to be attached prior to the deal’s approval. One of the restrictions was that the merged entity could not preclude or induce liquor outlet owners from offering space to its competitors. In its court filing Distell now alleged that SABMiller, which is now part of AB InBev, has failed to comply with these requirements by concluding exclusive contracts, which prevented liquor outlet owners from offering advertising space to competitors. Supposedly AB InBev has offered cash payments or benefits in kind such as refurbishments of outlets, fridges, flat-screen television or audio equipment in return for exclusive promotional rights in the outlets.
The Competition Commission now ruled that “the conditions had not been breached,” The Africa Report wrote today. However, Distell is seemingly not giving in and plans to pursue the matter further with the Competition Tribunal. Dennis Matsane, Distell’s Corporate Communications Manager & Head-Corporate Affairs, says the company has asked the Tribunal “to issue a notice of apparent breach of merger conditions and that the conduct relied on by Distell be fully investigated.”
In 2016, AB InBev sold its 26.4 percent stake in Distell Group at a reported sales price of roughly 9 billion rand (USD 645 million) to Public Investment Corporation, to comply with regulations set forth by South-African antitrust authority for approval for AB InBev’s take-over of rival SABMiller (inside.beer, 16.12.2016)