See you in court!
Competition is straining relations between Ethiopia’s s state-owned Meta Abo brewery and the privately-owned BGI which is controlled by the Frenchman Pierre Castel. Meta Abo, which is the largest of Ethiopia’s four government-controlled breweries, has launched a public complaint against the market leader, BGI (with 2 breweries in Ethiopia), claiming it has been the victim of unfair trading practices by BGI. According to reports in the local media, there is more at stake for BGI than its reputation because Meta Abo is also asking for compensation.
In April, the manufacturer of St. George Beer, BGI Ethiopia PLC, who has been indicted by Meta Abo for unfair trading practices, presented its defence witnesses to the Trade Practice Commission. In the complaints brought against BGI, Meta Abo had indicated that BGI conducted defaming campaigns around the country in order to sell its St. George, Castel and Bati beer brands as well as its draught beers.
Furthermore, Meta had complained that BGI refused to provide St. George’s draught beer to bars that sell Meta’s products, and that it was giving cash and health coverage to beer girls to exclusively sell BGI’s products at their establishments.
With the spat between Meta Abo and BGI turning more vitriolic and public, it seems like the cushy days of administrating scarcity are truly over in Ethiopia’s beer market. That Meta Abo decided to take its matter to court is another case in point that Ethiopia’s government-controlled breweries find it hard to adjust to the new times.
Because what has BGI been doing? From what the papers say, BGI has been trying to obtain exclusivity contracts one way or another. That’s what brewers the world over have been doing for ever. It may pain Meta Abo that BGI can give away free beer during a promotion, but if BGI can afford it? Admittedly, to Meta Abo some practices may appear less acceptable than others, yet they are hardly illegal.
It will be interesting to hear the Commission’s verdict on Meta Abo’s claims for compensation. Meta Abo accused BGI of severely decreasing its market share and has asked the Commission to order it to stop these damaging activities and pay close to one million birr in compensation (EUR 83,000) for revenue lost up to the date the complaint was filed. In 2006 Mets Abo had close to EUR 20 million in turnover.
The decision will be keenly awaited by brewers and international donor organisations too because it will show whether Ethiopia’s ruling party really believes in the market economy of whether it is only paying lip-service to it in order to appease the international community.
Ethiopia’s beer market, supplied by five beer companies, is one of the most competitive industries in the country, although demand is believed to be much higher than the 3.0 hl they collectively brew annually.
