A federal agency overseeing competition in the market queries about the impact of BGI-Ethiopia's acquisition of Meta Abo Brewery, asking other breweries for their views on its effect on their business and the beverage industry at large.

The Competition & Consumer Protection Authority (TCCPA) has dispatched letters to Heineken, Dashen, Habesha and United breweries on February 4, 2022. The companies have been asked to forward their take on the acquisition beginning this week as the Authority begins assessing the impact on competition, the market and consumer protection.

Last month, Diageo, a UK-based beverage company, announced an agreement had been reached with BGI-Ethiopia to sell what was once a state-owned brewery. Diageo wants to sell 99.9pc of its shares in Meta Abo, once a state-owned company before it was acquired 10 years ago for 225 million dollars. Established in Sebeta town, Oromia Special Zone, 30Km southwest of Addis Abeba, in 1967, Meta has an annual production capacity of 1.7 million hectoliters. It has not been disclosed how much Diageo has agreed to sell a company that once was its archrival.

The owner of popular brands such as Guinness, Johnnie Walker, Crown Royal (whiskey) and Smirnoff (vodka), Diageo also supplies spirits to the domestic market. Its stock prices at the London Stock Exchange have declined by about two percent over the past month.

Documents about the ongoing deal were submitted to the Authority two weeks ago. According to sources close to the case, the submission omits a tax clearance certificate. Issues with outstanding tax liabilities complicate BGI-Ethiopia's acquisition of Meta Abo Brewery, for these are required to proceed, the source disclosed.

Diageo declined to disclose the acquisition value to Fortune. But it has invested close to 400 million dollars in expansion projects since it took ownership of the company in the early 2010s.

"What I can say is that an agreement for the sale of Meta Abo Brewery to BGI has been signed," said Clemmie Raynsford, head of market communications at Diageo. "This sale is subject to approval by the Authority and certain other conditions.”

However, Meta Abo will settle its outstanding tax liabilities to fulfil the transaction, according to Raynsford.