Beer Wars: Golden Guinea files N10bn suit against Pabod over alleged trademark infringement

Posted by News Express | 5 July 2018 | 2,174 times

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Golden Guinea Breweries Plc has approached the Federal High Court demanding for general damages in the sum of N10 billion from Pabod Breweries Limited, a company which AB InBev has controlling equity saying Pabod infringed on its trademark for the production of Eagle Stout.

Already, the case has been heard twice since 2016. The latest hearing would have been on Friday, June 15 being the day Trade Mark Registry was invited by the Court to come for examination but the case was adjourned because of the public holidays to commemorate the 2018 Eid-el-fitr. The Court has set October 24, 2018 as the new date for the hearing on this suite.

Golden Guinea Breweries Plc wants the Federal High Court to declare that as the proprietor of the trademark “Eagle Stout” registered as No. 21153 in class 32 at the Nigerian Trade Marks Registry Abuja, it is entitled to the exclusive use of the mark for the production, sale and distribution of the product in the Nigerian market.

Aside the N10billion general damages being demanded by Golden Guinea Breweries (the plaintiff) from Pabod Breweries (the defendant), the plaintiff is also asking the court to order for aggravated damages in the sum of N10 million as contained in the suit number PHC/PH/CS/647/2016 at the Federal High Court at Port Harcourt.

In the Writ issued by Omolola Aderolu of Johnson Bryant on behalf of Golden Guinea Breweries Plc, it asks the Court to restrain Pabod Breweries whether jointly or severally and all persons on whose behalf the defendant is sued whether by themselves, their director(s), officer(s), servant(s), agent(s) privies or any of them or otherwise howsoever from producing, importing, selling, or offering for sale or supplying products known as “Eagle Stout” pending the hearing and determination of the substantive suit.

Among other demands, Golden Guinea Breweries also asks the Federal High Court to order the destruction of all infringing “Eagle Stout” products, in the possession/custody or control of Pabod Breweries, the sale, distribution.

Golden Guinea is also asking the court to order for the obliteration of all marks upon oath, all containers, cartons, show cards, display matter, signboards, advertisements, circulars, notepapers, business cards, letterheads, stationery, labels, wrappers, photocopies or other printed materials or other products, papers or marked articles bearing the market/name “Eagle Stout” in the possession/custody or control of Pabod Breweries.

BusinessDay sent out emails to the media relations team at Pabod Breweries and Ab Inbev requesting information on the court case but did not receive any answers as at the time it went to press.

In October 2016, the world’s largest brewer Anheuser-Busch InBev (AB InBev) completed a $106 billion takeover of SABMiller, the second largest.

That merger meant that one in three beers that are consumed comes from the giant brewer. That merger also resulted in AB InBev taking over the business of SABMiller in Nigeria, which has led to the merger between International Breweries Plc (based in Ilesha), Intafact Breweries Limited (based in Onitsha), and Pabod Breweries Limited (based in Port Harcourt) which is the defendant in this suit. AB InBev currently owns 75percent of Intafact, 82.8percent of Pabod Breweries and 72.2percent of International Breweries.

Golden Guinea Breweries Plc is located on Aba Road, Afara Layout, Umuahia in Abia State while Pabod Breweries Limited is on 186/187, Trans-Amadi/Elelenwo Bypass, Old Port Harcourt Two, Port Harcourt, Rivers State.

Before the takeover by AB InBev, SABMiller which hitherto owned Pabod Breweries was the third largest brewer in Nigeria after Heineken’s Nigerian Breweries Plc and Diageo’s Guinness Nigeria Plc. Although SABMiller entered the Nigerian beer market late in 2009, it moved swiftly to acquire Pabod Breweries.

“We have it in good authority that SABMiller did not declare this court case to AB InBev. I remember that in 2016 we shut down their operations in Port Harcourt for two days based on court order. The records and pictures are there in the court,” according to an informed source at Pan Marine Investments Limited, the current core investors in Golden Guinea Breweries Plc. Sources say the case could be a market risk for the AB Inbev transaction.
“From your questions, I don’t think AB InBev is aware of the court case or is it that they are aware and ignored it. Just like you said, the suit is dated back to 2016 the same year AB InBev completed an over $100billion takeover of SABMiller which was the parent company of Pabod. Whichever way, this is an interesting time in the Nigerian beer market,” a Lagos-based Lawyer who didn’t want his name in print told BusinessDay on phone.

Investment firm Renaissance Capital recently revised estimates for the Nigerian beer market post the introduction of higher alcohol excises, adding that the Nigerian consumer is still under pressure leading to an intense fight for market share among operators in 2018-2019.

“With International Breweries (IB) not increasing prices – unlike Nigerian Breweries (NB) and Guinness Nigeria – we see it taking additional market share but at the cost of operating margins. On net, we believe valuations are stretched, especially for IB, which is trading at a material premium to peers on forward multiples and fundamentals,” Adedayo Ayeni, Renaissance Capital analyst said in a July 03 note.

“We, therefore, downgrade our rating for International Breweries to SELL (from Buy) and cut our Target Price (TP) by 3%. We cut our TP for Nigerian Breweries by 3% and upgraded to HOLD (from Sell) after a material de-rating YtD. We cut our TP for Guinness Nigeria by 9% and maintain our HOLD rating.”

With its newly installed equipment which capacity of producing 48,000 bottles per hour (1.15million bottles per day), Golden Guinea Breweries Plc said its production capacity will more than double that at Nigerian Breweries’ Ama, Enugu plant and SABMiller’s Intafact Beverages in Onitsha.

Golden Guinea Breweries Plc was established by Premier of the defunct Eastern Region, Michael Okpara. The company was originally named Independence Brewery Limited.

It started production in 1963 with an annual capacity of 1 million gallons. The company introduced Eagle Stout to the market in 1967 but between 1967 and 1970, further production was hampered by the Nigerian Civil War.

The Brewer was listed on the Nigerian Stock Exchange (NSE) on January 1, 1979. Its production was shut down in 2003 following a fire outbreak which affected its boiler.

Pan Marine Investments Limited is currently the core investor in Golden Guinea Breweries Plc and it has intensified efforts to bring the drinks back to their consumers.

With the efforts of the core investor, and the support of both Abia State and Federal Government, some of the company’s “ready-to-use” equipment includes the Fermenting Plants, Bright Beer Tank (BBT) unit, two big Boilers, CO2 Plants, Mash Filter Units, the Grain Handling Plants, Weighing Scale, Hammer Mill and Roller Mill, the Polisher, Receiving Scale, and the Silos. (BusinessDay)

Source: News Express

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