Diageo borrows heavily from British colonialism and slavery in Africa in running its script for the management of its African affiliates.
Global alcoholic beverages behemoth, Diageo, has been fined by the biggest African economic bloc for abuse of its dominant market position, in various member country territories.
In October 2025, Diageo agreed to pay $750,000 to settle a 4-year competition investigation by the COMESA Competition Commission (CCC) over restrictive business practices across several East and Southern African markets.
COMESA (Common Market for Eastern and Southern Africa) is a 21-member organization, thereby making it the largest regional economic organization on the African continent and adjacent islands.
We understand Diageo, don’t we?
A British company, likely suffering from hangovers of Empire, operating in near-monopoly status in Africa, headquartered in the United Kingdom, where the African continent is viewed by the Brits purely in extractive terms, virgin territory to be gang-raped by clever white people.
When Africa attempts to export its population to the land of the Brits, there is a lot of frothing at the mouth in general. I don’t know what could be more ironical. They want to milk everything from the African continent, but are hard-pressed to accept its people.
Some of the corporate atrocities carried out by Diageo in Africa would be unconscionable anywhere else in the World, for Africa though, the ethical bar has been kept ridiculously low, and the unacceptable eventually made to seem normal or rational, spoken of in haughty accents, this is Africa (TIA) after-all (wink wink).
The COMESA settlement followed a June 2021 probe into the fact that Diageo’s distribution agreements in Eswatini (formerly called Swaziland), Seychelles, Uganda and Zambia breached specific COMESA competition regulations.
Certain practices, namely market allocation, price fixing and single-branding restrictions, were thought to limit trade within the regional economic bloc.
The issue of market allocation of distributorships seems to be a recurring trend all over Africa, but most diabolically, in Kenya, which falls under the ambit of East Africa Breweries Ltd (EABL).
East Africa Brewing Limited – EABL
EABL, headquartered in the Kenyan Capital, Nairobi, is a holding company for several East African companies, namely, Kenya Breweries Ltd (Nairobi, Kenya) Uganda Breweries Ltd (Kampala, Uganda) and Serengeti Breweries Ltd (Dar es Salaam, Tanzania).
In Kenya, EABL has imposed tight price controls, where a unit of beer or spirits costs the exact same across the length and breadth of the Republic, and enforced ruthlessly via system called DFS.
Similarly, distributors are restricted to specific geographical zones and they aren’t allowed to sell outside said zones
The biggest indicator of abuse of market dominance in East Africa, is the unwieldy situation in Kenya, where EABL directly controls and operates the bank accounts of all its contracted 120+ alcohol distributors.
In 2018, EABL required all distributors to be part of a new Distributor Finance Scheme (DFS) with 5 nominated banks (including SCB, KCB, Equity & Absa). All clients (pubs) were required to pay for their alcohol via Safaricom till numbers (online money wallets) which were in turn linked to these DFS accounts, and by extension, were controlled by EABL.
All the working capital from the distributors was deposited into these bank accounts and EABL has the mandate to singularly debit (remove funds) from the account of the distributors.
EABL might as well be running the distributorships themselves.
As you can imagine, EABL would routinely abuse this power and move funds without reconciliation or consultation. When the funds were low in the bank accounts, EABL would demand that the distributor tops up their guarantee or working capital levels. Oftentimes it was mobile services provider, Safaricom, that had delayed crediting (putting funds into) this DFS account from the stated mobile money wallets.
It did not matter, EABL expects instant top-up.
Distributors are also restricted as to what they can sell. For instance, even within their stable of products, Keg (a fast-moving low level brand) distributors are not allowed to sell regular beer and whiskey, while conversely, those that sell beer (like globally acclaimed brand Tusker) and Whiskey (like Johnnie Walker) cannot sell Keg beer, no matter the demand.
Does Kenya have a Competitions Authority and why hasn’t a formal complaint been made by any of these current or past EABL distributors against this abusive set-up? Why haven’t Kenyan distributors filed a formal complaint with COMESA?
There is an African saying that fish always rots from the head, and if Diageo’s East African affiliate in Kenya is struggling with ethical fidelity, it is a pointer that the leadership at Diageo Global headquarters has unwittingly allowed this state of affairs, hence are either grossly incompetent, or that they are themselves compromised.
It could be that the Diageo leadership in London, happy to continue making super-profits in Africa, knowingly allow the African leaders some latitude, to get away with what are clearly unethical practices, to keep these African leaders on their side, much in the same way the British used African Chiefs and headmen, by allowing them to get away with atrocities against other Africans, as long as they met their quotas and targets by use of near slave labour.
$750,000 to make the COMESA issue disappear is a drop in the ocean for Diageo, but what will happen in other jurisdictions, where similar judgments would likely run into 10s of millions of dollars each?
Don’t these ethical and misguided business practices have consequences or self-evident symptoms?
For example, there is a nexus between the COMESA settlement and the massive problems currently facing EABL at home in Nairobi, Kenya.
In Kenya, the High Court, the Court of Appeals and the Supreme Court all upheld a guilty verdict for contempt of court, for three senior officers of EABL, namely, CEO Jane Karuku, current KBL MD Andrew Kilonzo and Andrew Cowan who is currently MD Diageo Global Travel.
Truly, managers are promoted to their next level of incompetence.
The three Diageo officers are awaiting sentencing by the Kenyan High Court for kicking out an existing distributor and replacing him with their friends and cronies despite a court order explicitly directing them not to do so.
Corporate impunity. The trio simply thought to themselves, fuck it, what’s the worst that could happen if they ignored the order?
In any case, despite this, Diageo still promoted Jane Karuku (who was then KBL MD) to the position of EABL CEO. They then promoted Andrew Kilonzo to MD at Uganda Breweries Ltd and then promoted Andrew Cowan to the position of MD for Africa Regional Markets at Diageo. Cowan had been EABL CEO prior to that.
Andrew Kilonzo – CEO of Uganda Breweries Limited
Andrew Kilonzo, unpunished in Kenya, exported his bad manners to Uganda and as a result, UBL has now found itself in the COMESA cross-hairs and joins the ignoble quartet of offending countries.
As has come to be expected of Diageo whenever its officers get into a spot of trouble, they either promote them or shuffle them about from the epicentre of the problem, it is no surprise that Kilonzo has now been rotated back to Kenya as KBL MD, to team up again with Jane Karuku, and ensuring that the duo has come full circle.
Corporate lack of moral probity always leaves a trail, often-times, the crumbs are so evident that if you follow them, they assist to get the complete picture.
In October 2025, EABL redeemed its Ksh. 11 Billion ($85 million) 5-year corporate bond a year early. The original maturity date for this bond was October 29th 2026 after it was floated in 2021.
Reason? EABL invoked its call option (option for redemption) on this Bond supposedly to cut down on finance costs and optimize its balance sheet.
Here is the kicker, EABL immediately launched a new 5-year Kes. 11B ($85 million) Bond though at a modestly slightly lower interest rate.
The initial 2021 Bond had been issued at a 12.25% coupon while the new 2025 Bond has been issued at a lower rate of 11.8%.
The total interest payout on the 2021 Bond was supposed to be Kes. 6.737B ($51.8M) but since EABL did not payout the final year, the total payout ended up being the reduced figure of Kes. 5.390B ($41.4M).
Now, over the 10 years for which the 2 Bonds were issued (2021 -2031) EABL expected to pay out a total of Kes. 13.227B ($101.7M) in interest. Now they will end up paying the reduced total of Kes. 11.880B ($91.384M).
Over that 10-year period, EABL will have made a combined saving of Kes. 1.347B ($10.361M).
This “saving” of Kes. 1.347B ($10.361M) represents only the interest that should have been paid out in the last year (2025 -2026) of the re-called Bond. In essence, while the two Bonds ought to have been for a total of 10 years, EABL will only pay interest on 9 years, and the extra year is what they claim is a saving.
This is simply a shuffling of the deck in a game of ‘sleight of hand’ where shareholders are sold the speculative fiction that there will be a saving, but this saving was entirely from missing out a full years interest payments on the final year of the original Bond.
In the East African language of Swahili, it is referred to as ‘Kiinimacho’.
Do not let the over-subscription on the Bond fool you either, it simply indicates appetite from investors, and that EABL is considered a safe place to invest. Even at the reduced 11.8% coupon, it beats many of the credible shorter term notes.
Why would EABL go through all this just to make a small saving (in relative terms) from the issuance of Bonds and shuffling the interest payments when it could achieve similar savings by rationalizing the operations of its legal department, and the many unnecessary court cases that could be resolved via arbitration or by giving more teeth to its internal audit department to stem the tide of self-evident wastage and conflict of interest?
The October 2025 Bond redemption and fresh issuance has coincided with a new court matter in which EABL has sued Kenya Revenue Authority (KRA) for an over-payment of VAT to the tune of Kes. 800 million ($6 million) from back in 2018.
Note, though EABL is suing KRA for an over-payment, remember it used it’s dominant position to forcefully recover these monies from its 120+ distributors in Kenya by issuing them debit notes and withdrawing the funds directly from the distributor bank accounts over a 6-month period, even though each of these distributors had separately fulfilled their tax obligations.
None of the distributors at the time could say a word because they had learnt that EABL leadership is extremely petty and vindictive, and any complaints would result in the summary termination of their distribution contracts. So they sucked it up and went about their business.
EABL has never been out-of-pocket on the tax issue, so the question therefore is, on whose behalf is EABL suing KRA?
We can only surmise that this Kes. 800 million ($6 million) tax money that was forcibly collected from the distributors over a 6-month period in 2018, has probably been siphoned off to private bank accounts and this hole in EABL accounts needs to be plugged, hence the shuffling of the Bond interest payments to cover this shortfall.
Here in the double-dip. Should the courts rule in favor of EABL in the over-payment of VAT case, to whom will this tax refund go? Shouldn’t it go directly and pro-rata to the 120+ EABL distributors that actually made the payment to KRA on behalf of EABL?
My feeling is this tax rebate may get siphoned into private bank accounts, with unscrupulous people paying themselves double from one situation. Only in Africa.
Rumors also abound of an imminent out-of-court settlement, in the case where the trio of Karuku, Kilonzo and Cowan have been found guilty of contempt of court, and where the main suit petitioner seeks upwards of Kes. 1 Billion ($7.7 million) in compensation.
Andrew Cowan – Regional Head Diageo
Apparently, this unbudgeted settlement that seeks to resolve the case would leave a massive hole in EABL books and questions from many stakeholders. In anticipation of such a settlement, approved the call option on the first Bond. The funds saved from the final year interest payment would be used as a buffer for the company.
Once paid, there will be a basis for the withdrawal of the court case and the setting aside of the guilty verdict for contempt of court. Through corporate gymnastics, the aforementioned three officers of Diageo and EABL would have used investor funds to cover their retreat, and go scot-free, for their actions of omission and commission.
It is this type of strategy that has characterized EABL for the last 10 years since the arrival of its CEO Jane Karuku, initially as KBL MD, a decade ago.
Also joining EABL at the exact same time was Legal Affairs Director, Rowlands Nadida.
Nadida continues to leverage the humongous legal budget that is set aside by EABL annually, to rush even the most innocuous or frivolous legal matter to court, even those that could be settled out-of-court and resolved quickly and amicably.
For these court matters, Nadida uses his shortlist of one law firm to do handle virtually all the big cases.
EABL Head of Legal Rowlands Nadida
Starting with this contempt of court case that has been in court for close to a decade, and also the new matter against KRA, which may take another 10 years to resolve plus a myriad of other cases, one law firm seems to hold a monopoly.
With monthly retainers of close to Kes. 3 million ($23,000) and separate billings for the various matters, the law firm must be cashing in big-time. So why would the same law firm advise EABL to expeditiously settle matters out-of-court or through arbitration when a humongous legal budget is approved by Diageo annually, and just sits there, easy pickings?
It is bad legal advise by default and even within EABL, there are whispers. In country like Kenya, which is ranked high on all global corruption indices, and where there are no coincidences, inferences have been drawn as to why this irregular state of affairs exists.
Finally, the question on everyone’s mind. If EABL and Diageo and their officers routinely misuse their positions, why should anyone trust their products?
Why wont Diageo and EABL cut corners in their manufacturing processes? Can their products, including their World-acclaimed brands be trusted to have undergone the correct manufacturing and quality standards?
Why should there be limits to successive corporate irregularity and impropriety?
If the leadership has shown their subordinates that they themselves are morally fluid, why wont these junior officers take this as a cue to apply similar standards in their own dealings within their individual departments?
For example, why wouldn’t sub-standard raw materials be passed, costs on sub-standard raw materials etc brought at inflated prices etc
And structural weaknesses certainly do exist within the organization, which is why it took seven (7) bloody years for a so-called over-payment of tax to be flagged, and legal action to recover it be undertaken.
But what do I know. This is Africa (TIA) after all!
