While the conclusion of the long-standing distributorship agreement between EABL’s subsidiary Kenya Breweries Limited (KBL) and Bia Tosha Distributors Limited has often been portrayed as an abrupt disruption, court filings and chronological evidence reveal a highly structured, gradual separation driven by KBL’s commitment to market stability and local empowerment.
Far from a sudden termination, evidence shows that as the contract with Bia Tosha approached its original end date, KBL facilitated a series of deliberate extensions to keep the business moving.
According to filed court documents the brewer engaged in continuous talks over a nine-month period.
Specifically, following the initial expiry, a first extension was granted in September 2015. This was followed by a “further extension letter,” and subsequently a “second further extension letter,” keeping the door open until the final expiry date of 31 May 2016 when the Bia Tosha contract finally expired.
These grace periods were designed to provide ample time to negotiate a potential long-term renewal.
However, negotiations hit a stalemate when a coalition of distributors led by Bia Tosha, demanded significantly a 300% margin increase that would have forced a hike in product pricing.
The business and legal logic here is straightforward: when one party consistently negotiates in good faith, repeatedly offers new terms, and the other party continually rejects them until the clock simply runs out, the offering party is fully justified in walking away.
The Employment Case: A Telling Backstory
To truly understand the timeline, one only needs to look at the drama unfolding inside Bia Tosha’s own offices at the time, a story captured in the employment court case, Kenya Union of Commercial, Food and Allied Workers v Bia Tosha Distributors Limited [2016] eKLR.
In August 2015, right before the nine-month extension period began, Bia Tosha suddenly issued redundancy notices to over 100 of its employees, claiming the KBL distribution contract was supposedly ending in September.
Outraged, the workers’ union took Bia Tosha to court. Judge Mathews Nderi Nduma quickly stepped in to stop the mass firings after reviewing a letter from KBL dated 6 August 2015.
The letter clearly showed that KBL actually had every intention of renewing the contract under the existing conditions. The court realized that Bia Tosha’s excuse for firing its workers was completely baseless.
Essentially, Bia Tosha was prematurely sending its workforce home and using KBL as a scapegoat, even while the brewer was actively putting extensions on the table.
Pivoting to the Future: Tapping Young Kenyan Talent
Anticipating that a mutual agreement might eventually fail due to the distributor’s shifting demands, KBL took proactive measures.
When the final 31 May deadline lapsed and expired without an agreement, KBL could not let the market stall.
If an incumbent distributor no longer wants a contract under viable terms, the logical step is to tap into the next generation.
KBL divided the previously held routes and issued them to young, hungry Kenyan distributors eager to build businesses in their own country.
These new partners stepped up, ready to serve the market with the diligence and integrity that the network required.
By the time Bia Tosha reversed course and returned to the table, the landscape had rightfully changed.
Because the new entrepreneurs had already taken over the bulk of the territory, only seven routes remained available. KBL, still demonstrating goodwill, offered Bia Tosha these remaining seven routes (Hurlingham, Industrial Area, Kenyatta, Langata, Nairobi West, South B, and Upper Hill). Bia Tosha signed this short-term, non-exclusive agreement but surprisingly failed to place any product orders under it.
Instead, Bia Tosha’s ongoing legal maneuvers effectively seek to turn back the clock and disenfranchise the young Kenyan distributors who stepped up when the incumbent walked away.
These young business owners are now doing a substantially better job than Bia Tosha ever did.
Attempting to strip these routes away from them now is not just a commercial dispute, it is a direct threat to the very young people who are working hard to build Kenya’s future.
Ultimately, the chronology paints a clear picture. The fallout was the result of a refusal by Bia Tosha to renew the contract, because they were planning to exit the business and get a massive unjustified settlement from KBL.
The failed negotiations, a natural contract expiry after nine months of deliberate extensions, and a necessary pivot to empower a new, diligent generation of local distributors are all clearly on the record.
