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The Comesa Competition Commission has fined global beverages giant Diageo $750,000 (Shs2.5b) for engaging in anti-competitive business practices across Uganda, Eswatini, and Zambia.
Diageo, the majority shareholder in East African Breweries Limited, was found to have breached regional competition laws by restricting trade and distorting market dynamics within Comesa.A 13-page ruling indicates that the Commission concluded that Diageo’s distribution and production agreements contained restrictive clauses that undermined fair competition and regional integration.
The case, filed in 2021, followed complaints from distributors about Diageo’s contractual terms.
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The investigation identified clauses on minimum resale price, single-branding, and territorial restrictions, which the Commission said prevented fair competition.
The Commission found that Diageo’s contracts allowed it to influence retail prices, compel distributors to sell only its products, and prohibit them from selling outside designated territories
In Uganda, these territorial restrictions were particularly strict, cutting off distributors from potential cross-border markets. The Commission ruled that the practices violated the Comesa Competition Regulations, which outlaw agreements that prevent or distort competition within Comesa.
“These arrangements frustrated regional trade integration and ran counter to the objectives of the Comesa Treaty,” the ruling reads in part.
After four years of correspondence, the Commission issued a Statement of Concern in September 2023, allowing Diageo to respond. Diageo initially denied wrongdoing but later opted for a negotiated settlement.In May 2025, Diageo and the Commission reached a Commitment Agreement, a legal mechanism allowing companies to settle cases without admitting liability.
Under the deal, Diageo agreed to pay $750,000 (Shs2.5b), remove all restrictive clauses from its distribution contracts, and notify distributors within 30 days that such clauses were no longer enforceable.
It also committed to submit compliance reports for three years.
The agreement was signed in London, UK, on September 30, 2025, by James Edmunds, Diageo’s General Counsel, and Dr Willard Mwemba, the Commission’s Director and Chief Executive Officer.
The ruling was particularly critical of Diageo’s operations in Uganda, where its subsidiary Uganda Breweries Limited was found to have imposed severe territorial restrictions that barred distributors from selling outside their zones, even within neighbouring Comesa countries.
