The Common Market for Eastern and Southern Africa (COMESA) Competition Commission has imposed a fine of USD 750,000 on global alcoholic beverages manufacturer Diageo Plc, the majority shareholder in East African Breweries Limited (EABL), for engaging in anti-competitive business practices across Uganda, Eswatini and Zambia.
The ruling, contained in a 13-page decision issued on September 21, 2025, concluded that Diageo’s actions violated regional competition laws by restricting trade and distorting market dynamics within the COMESA region.
The Commission’s decision follows a multi-year investigation into the company’s distribution and production agreements with local partners, which were found to contain clauses that limited competition and cross-border commerce.
The investigation, formally registered as Case No. CCC/ACBP/4/1/2021, was launched in June 2021 after COMESA received complaints about Diageo’s restrictive distribution practices.
The Commission’s Notice of Investigation outlined three major concerns in the agreements that Diageo had signed with its distributors: minimum resale price maintenance, single-branding restrictions, and territorial limitations.
These clauses, COMESA determined, directly undermined the principles of free market competition that underpin the COMESA Treaty and its regulations.
According to the ruling, the clauses on minimum resale price maintenance allowed Diageo to set or influence the retail prices charged by distributors.
Single-branding restrictions compelled distributors to sell only Diageo products, locking out rival brands from access to the same distribution networks.
Territorial restrictions, particularly evident in Uganda, prohibited distributors from selling outside their designated areas, effectively cutting them off from other COMESA markets.
Such arrangements, the Commission ruled, frustrated regional trade integration and violated Article 16 of the COMESA Competition Regulations, which forbids agreements that prevent, restrict, or distort competition in the common market.
After years of correspondence, the Commission issued a Statement of Concerns in September 2023, giving Diageo an opportunity to respond by October that year.
The company initially contested the allegations but later opted for a negotiated settlement.
By May 2025, Diageo and the Commission had entered into discussions that culminated in a Commitment Agreement, a legal settlement mechanism through which companies admit no guilt but commit to corrective actions.
Under the settlement terms, Diageo agreed to pay USD 750,000 to COMESA “in full and final settlement” of the investigation.
The company also undertook to remove all restrictive clauses from its distribution and production agreements, to notify all its distributors within 30 days that such restrictions were no longer applicable, and to submit regular compliance reports for the next three years.
The agreement was formally signed in London on September 30, 2025, by James Edmunds, Diageo’s General Counsel and the Competition and Deputy Company Secretary, and Dr. Willard Mwemba, Director and Chief Executive Officer of the COMESA Competition Commission, marking the conclusion of the case.
The ruling was particularly critical of Diageo’s practices in Uganda, where its local subsidiary, Uganda Breweries Limited (UBL), was found to have imposed severe territorial restrictions on its distributors.
These agreements, according to the Commission, prevented distributors from selling products outside their assigned territories, even when opportunities existed across borders in neighboring COMESA states.
Netflix Strikes $82.7 Billion Deal to Take Over Warner Bros., Redefining the Global Entertainment LandscapeThe Commission argued that such territorial segmentation contradicted COMESA’s broader vision of seamless intra-regional trade.
Similar practices were identified in Eswatini and Zambia, where Diageo’s distribution arrangements limited local import substitution and shielded the company’s dominant position from competitive pressure.
Diageo defended its actions, arguing that the restrictive clauses were standard commercial safeguards intended to maintain brand integrity, prevent parallel imports, and ensure quality control.
However, COMESA rejected this justification, observing that such clauses, when imposed by a dominant market player, have the effect of excluding competitors and distorting market access.
The Commission noted that Diageo’s market share in the affected countries gave it the ability to influence distribution terms and suppress smaller players, creating artificial barriers to market entry.
In a bid to avoid a lengthy adjudication process, Diageo proposed commitments aimed at addressing COMESA’s concerns.
The company pledged to revise its existing distribution agreements, eliminate territorial and pricing restrictions, and ensure that future contracts comply with the regional competition framework.
Within 30 to 45 days of the agreement’s effective date, Diageo is required to submit written proof of compliance and evidence of communication to distributors across Uganda, Eswatini, and Zambia.
The Commission’s decision represents one of the most significant enforcement actions in its recent history, sending a powerful message to multinational corporations operating in the region.
It reaffirms COMESA’s readiness to act against conduct that undermines fair trade and regional integration.
The fine, while modest in size relative to Diageo’s global revenues, carries immense symbolic weight.
It demonstrates the bloc’s growing institutional capacity to regulate cross-border commercial behavior and enforce accountability among multinational market leaders.
Diageo, through EABL, remains a dominant force in East Africa’s alcoholic beverages industry, with a portfolio that includes popular brands such as Guinness, Tusker, Johnnie Walker, and Bell Lager.
The company’s subsidiaries including, Kenya Breweries Limited, Uganda Breweries Limited, and Serengeti Breweries Limited in Tanzania, control a significant share of the regional beer and spirits markets.
The COMESA ruling is therefore expected to have ripple effects across EABL’s regional strategy, potentially prompting a review of how its products are distributed and marketed across borders.
In Uganda alone, where the beer industry is valued at over UGX 2 trillion, reduced territorial restrictions could increase distributor flexibility, promote product diversity, and enhance consumer choice.
