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Distributors Take Coca Cola To Court

Business

Distributors Take Coca Cola To Court

By George S. Khoryama.

There is a court case looming between the Sierra Leone Bottling Company better known as Coca Cola Company and some of its former Manual Distribution Centres Operators. These Manual Distribution Centre Owners (MDCO) who were Small Business Entrepreneurs (SME) claim that Coca Cola Company has killed their businesses instead of supporting them.

According to the information gathered by this reporter, Coca Cola Company had about twelve distributors in Sierra Leone when it first started operations. These distributors were known as Key Distributors. They were responsible for the distribution of all Coca Cola products in the country. However about ten years ago the management of Coca Cola approached some Small Business owners and asked them to become their partners in a new distribution system to be introduced in Sierra Leone. The new system management said will be known as Manual Distribution Centres (MDC).

Management claimed that the Manual Distribution System will replace the Key Distribution System. The Key Distribution System, management said, was not effective in selling its products.  Therefore they were going to increase the number of distributors in the country. The Small Business owners were asked to invest in the Manual Distribution Centres. The Key Distributors also became known as Manual Distribution Centres.

Many of the Small Business Owners who were asked were appointed by Coca Cola management. They signed contracts with the company and invested heavily in the Manual Distribution Centres. They invested in empty bottles, liquid drinks, distribution equipment, employees, and warehouses, etc. They signed agreements that prohibited them from selling products that compete with Coca Cola. In short they lost their other business partners as many of them were wholesalers of soft drinks and bottled water.

However in February 2017 to the surprise of MDCs owners, without any notice, the management of Coca Cola invited sixteen of the distributors to a meeting. They informed them that the company was going back to its old distribution of Key Distributors. As a result sixteen of them would have their contracts terminated.

In March 2017 their contracts were terminated with a two-week notice even though they had an agreement that stated a three to six months’ notice. The affected distributors claimed that they were also intimidated by management. Management according to them threatened not to buy their empty bottles and if they failed to give them to the company within a specified date. Many of the distributors did so. However, seven of the affected distributors refused to be intimidated or threatened and decided to consult a law firm.

This reporter tried during his investigation and visited the shops and offices of the seven affected distributors. Many were found to be closed with iron bars and neighbours intimated that the businesses have not been operating.

The seven Small Businesses affected and that have taken legal action against Coca Cola management are Tha-Binta Enterprises, J.K Enterprises, Crystal Spring Enterprises, My Desire Enterprises, A.A Gabisi Enterprises, Rokel Trading and Amadu Bah Enterprise.

To set up the Distribution Centres as per the standard demanded by Coca Cola management required a costly investment. “Management asked me to be their distributor in Allen town where there were no other and I agreed. I went through the process by purchasing a vehicle, paid for 1,000 crates and drinks, 300 empties and in addition rented Distribution Centres,” explained Alhaji Amadu Bah of Amadu Bah Enterprises.

Alhaji Bah said he extended the business to Waterloo at the prompting of management where he suffered losses. “I spent over Le290, 000, 000, an equivalent of US$50, 000 to get the business going. He said without prior notice the company terminated his services by letter dated March 31, 2017.

Like the other distributors Umu Tejan Jalloh of Tha-Binta Enterprises confirmed that her contract was also terminated. She said that seven of the affected distributors have sought legal action and as such cannot say much. She added that they believe in their lawyers. However if they have to go to the International Court of Arbitration, she is ready to go all the way.

On line to A.A Gabisi Enterprises, Haja Ayodele Gabisi confirmed that indeed Coca Cola terminated her services. She said she could not say more because the case is with the lawyer.

On a visit to Madam Jenefer Kargbo Distribution Centre at No. 31 Wellington Street, the shop was found closed under lock and iron bars. According to information the shop had been closed for a long time.

The proprietor of Jaykay Enterprises at Hill Station Road in a brief interview also confirmed that her services were terminated by Coca Cola management. She was however hesitant to divulge further information.

Mrs. Ajaratu Dumbuya also affected by Coca Cola’s action in a telephone interview confirmed that her services were terminated. She however stopped short of saying more until she had consulted her husband. Two follow-up phone calls proved futile.

On line to cross-check the allegation, the Director of the Sierra Leone Bottling Company, Mr. Israel Okujaku, confirmed that his management terminated the services of some of their distributors. He said management decision to do so was informed in the process to restructure the company because the distributors were too many.  He said management invited the affected distributors to discuss the issue but that, while some cooperated, others did not.

“I cannot say more because the case is already in court,” Mr. Okujaku concluded.

The seven affected distributors have served the company from four to twenty years. Two of them have done so for over forty years.

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