8 December 2012

Tanzania: TBL Wins Brewers' Legal Wrangle

TANZANIA's largest brewery firm, Tanzania Breweries Limited (TBL), has won the case involving 25bn/- payments against Serengeti Breweries Limited in a landmark judgment delivered by the Fair Competition Tribunal (FCT) on Thursday.

In 2010, the Fair Competition Commission slapped on TBL a heavy fine of five per cent of its turnover which amounted to about 25bn/- for engaging in "anti-competitive behaviour against its bitter rivals, Serengeti Breweries".

TBL appealed against the decision by Fair Competition Commission (FCC) on the matter through its counsel, Dr Ringo Tenga of Law Associations, and Mr Fayaz Bhojan of FB Attorneys.

The two lawyers had raised one of the grounds of appeal that when hearing the anti-competitive behaviour by TBL, the FCC was not properly constituted as the Chairman, Mr Nikubuka Shimwela, was not properly appointed as its chairman.

TBL argued that the chairman had been appointed by the Minister for Industries and not by the President as per the requirements of the Fair Competition Act and hence any decision made by the Chairman was a nullity and should be dismissed.

Lawyers for the company had also argued that similarly, the Director General, at the time of the FCC, Mr Geoffrey Mkucha, had not properly been appointed. Judge Razia Sheikh, sitting with two members of the FCT, Prof Kironde and Prof Bundala, agreed with TBL arguments and stated that since the FCC was not properly constituted at the time of hearing the case, the decision to fine TBL five per cent of its turnover was inappropriate and, thus, quashed the decision.

The decision appears as a sign of relief for TBL, which was likely going to be forced to pay the 25bn/- had the appeal swayed the other way. TBL is owned by thousands of Tanzanians and is a good performer at the Dar es Salaam Stock Exchange. TBL is part of SAB Miller, one of the world's leading brewers with more than 200 beer brands and some 70,000 employees in over 75 countries.

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