Distributors Accuse BGI of Violating Court Order

Apr 1 , 2024

Around 14 distributors of the pioneering brewery BGI Ethiopia are locked in a legal battle with the company. The crux of the issue lies in a court injunction obtained by the distributors three months ago, which ordered BGI to maintain the existing distribution channels. However, they accuse BGI of breaching the court order and their contracts by assigning new distributors within territories already designated to them. The Association representing 37 companies with six billion Birr investment and 4,000 employees, made the case at the First Instance Court public last week. Sentayhu Gebreselasse, the president, alleges that BGI has disregarded requests from distributors to adjust transportation arrangements. He said that  BGI is calling this a "new strategy" to defy the two-year contracts signed in July 2023. BGI Ethiopia's five-year expansion plan was unveiled a few months ago. The company executives aim to consolidate its four subsidiaries (Meta Abo, Zebidar, Raya, and Castel) under a single entity called BGI and made several changes to realise it. While declining to comment on any ongoing court proceedings, Behailu Ayele, BGI's communication director, disclosed that they have a contractual agreement with individual distributors and are well within their right to readjust and improve sales territory. He said the strategy will bring mutually shared opportunities for all stakeholders. "We are changing our distribution model to increase our market share," he told Fortune.