
Fortune News | Dec 10,2018
Feb 12 , 2022
By HAWI DADHI
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.
How much Meta Abo owes in tax liabilities remains undisclosed.
Neither are BGI-Ethiopia executives forthcoming with information on the pending deal.
“More details will be made public once the approval process is finalised and certain conditions are met," reads a statement BGI-Ethiopia issued in response to Fortune's queries.
A deal for settlement of tax liabilities has been submitted to the Council of Ministers, which has forwarded its decision. However, the particulars of the decision remain undisclosed.
No sale can be completed before settling tax obligations, says Liku Worku, a legal expert.
“Otherwise, the buyer will have to acquire the company with all the liabilities, and it will be expected to pay the taxes," he said.
BGI-Ethiopia manages over half a dozen brands and runs its breweries in Addis Abeba, Hawassa, and Combolcha. Its breweries have a combined production capacity of over four million hectoliters annually, making it the second-largest brewer in Ethiopia. It had acquired Raya Brewery for over four billion Birr in 2017, and a year later, Zebidar for 1.8 billion Br.
The largest brewery in the market is Heineken, which commands a production capacity of five million hectoliters with over half a dozen brands. It entered the Ethiopian beer market in 2011 after acquiring Bedele and Harar breweries from the state.
PUBLISHED ON
Feb 12,2022 [ VOL
22 , NO
1137]
Fortune News | Dec 10,2018
Radar | Aug 20,2022
Radar | Oct 31,2020
My Opinion | Nov 21,2018
Fortune News | Mar 07,2020
Covid-19 | Aug 08,2020
Fortune News | Dec 27,2018
Fortune News | Feb 13,2021
Viewpoints | Apr 30,2021
Fortune News | Jun 20,2020
Dec 24 , 2022
Biniam Mikru heads the department of cabinet affairs under Mayor Adanech Abiebie. But...
Jul 2 , 2022 . By RUTH TAYE
On a rainy afternoon last week, a coffee processing facility in the capital's Akaki-Qality District was abuzz with activ...
Nov 27 , 2021
Against my will, I have witnessed the most terrible defeat of reason and the most sa...
Nov 13 , 2021
Plans and reality do not always gel. They rarely do in a fast-moving world. Every act...
Jan 21 , 2023
Eyob Tekalign, state minister for Finance, took to social media platforms last week t...
Jan 14 , 2023
The longing for normalcy and a semblance of individual and collective security in Eth...
Jan 7 , 2023
The hallmark of Ethiopia's contemporary leaders could be a fascination with grandeur...
Dec 31 , 2022
A change of guards in 2018 gave Ethiopians hope for better circumstances from the pre...