Coca-Cola Company is under investigation by the Common Market for Eastern and Southern Africa (COMESA) Competition Commission over suspected anti-competitive practices.

The commission announced it has begun investigating claims that the beverage giant violated Article 16 of the COMESA Competition Regulations.

Article 16 prohibits any agreements that may impact trade between member states if they aim to prevent, restrict, or distort competition within the Common Market.

According to the commission, there is reason to believe that Coca-Cola has entered into restrictive bottler and distribution agreements with its African affiliates, which may hinder competition across the region.

Restrictive agreements

“The Commission has reason to believe that The Coca-Cola Company has concluded restrictive bottler’s and restrictive distribution agreements or arrangements with affiliates in Africa which affect trade between Member States,” the statement read in part.

The regulatior will assess Coca-Cola’s actions to evaluate their impact on the Common Market and determine if they violate competition rules.

The investigation will focus on whether the alleged conduct has the intention or effect of limiting competition in the region or in a significant part of it.

However, the commission emphasized that the start of this investigation does not imply that Coca-Cola’s actions have already been determined as anti-competitive or that the company has breached any regulations.

With a product portfolio that spans more than 200 countries and territories, Coca-Cola has cemented its position as one of the world’s most recognized and valuable brands, and this move may impact on its ambitions in Africa.

Similar inquiries

Earlier this year, the watchdog also launched investigations into alleged anti-competitive conduct by telecommunication firms America Tower Corporation (ATC) and Airtel Africa.

The commission had received a complaint that a deal between the two companies contravened the Article 16 of the competition regulations.
In 2022, the two firms signed a multi-year, multi-product partnership that would see the Africa-focused telecom provider use the US-based infrastructure provider’s sites in Nigeria, Kenya, Niger, and Uganda to support its network rollout.

However, the reports implied that, according to the ongoing agreement, Airtel assumes the use of some specified ATC sites yearly, while ATC will offer Airtel a cash rebate in return. In essence, ATC will get some money back for patronizing ATC.