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Tuesday, 25 June, 2002, 17:02 GMT 18:02 UK
Kenyan brewer toasts liquor deal
EABL beer drinkers
EABL makes almost all of East Africa's beer
Kenya's East African Breweries Limited (EABL) has struck a $10.4m (6.9m) deal to buy two distilleries in Kenya and Uganda, tightening its grip on those markets.

"The purchase of the entire share capital of International Distillers Uganda (IDU) from Selviac Nederlands was endorsed on Monday by the company's shareholders during an extraordinary general meeting," said Brenda Mbathi, EABL's director of external affairs.

IDU is Uganda's leading spirits producer with a range that includes Waragi Gin, Smirnoff Vodka and Bond 7 Whisky.

Since 1999, IDU has contracted Uganda Breweries - an EABL subsidiary - to produce, market and sell all of its products in Uganda.

Near monopoly

EABL will also buy a 46.3% stake in the Nairobi-based United Distillers Vintners (UDV) from Kenya Wine Agency Holdings and First Chartered Securities.

EABL, which is 50% owned by Diageo, has a virtual monopoly over brewing in East Africa after convincing South African Breweries to quit the Kenyan market in May

The maker of Tusker, Pilsner, Guinness and Kibo Gold, announced its spirits strategy in 2000 and began production of Smirnoff Ice at its Ruaraka brewery under licence from Guinness UDV.

Diageo is already a majority shareholder in both Selviac Nederlands and UDV.

The Diageo Group was formed in 1997 through the merger of Guinness and GrandMet, which united Guinness, UDV, Burger King and Pillsbury.

See also:

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