Castel Malawi sells off Malawi’s historical company SOBO to Coca-Cola Beverages Africa 

Castel Malawi has announced that the French company has sold off Malawi’s historical company, Southern Bottlers Limited (SOBO) to Coca-Cola Beverages Limited, which a subsidiary to Coca-Cola Beverages Africa.

In an internal memo, Castel’s managing director, Herve Milhade said SOBO has entered into an agreement pursuant to which Coca-Cola Beverages Limited has agreed to purchase soft drinks business from SOBO.

SOBO produces Coca-Cola, Fanta, Sprite, Cherry Plum, Cocopina, SOBO Squash and several others since time immemorial.

Castel Malawi MD Herve Milhade

In acquiring Carsberg Malawi, Castel also bought SOBO subsidiary, Malawi Distillers Limited — producers of famous spirits such as Malawi Gin, Premier Brandy, Powers No.1 and others.

Milhade said Coca-Cola Beverages Africa (CCBA) is the 8th largest Coca-Cola bottler in the world by revenue and the largest in Africa as it accounts for over 40% beverages sold in Africa by volume.

“With over 20,000 employees, the CCBA group services approximately 600,000 outlets with a host of Coca-Cola beverages bearing international and local brands.

“The CCBA group currently operates in 14 countries, including six key markets of South Africa, Kenya, Ethiopia Uganda Mozambique and Namibia as well as Tanzania, Botswana Ghana Zambia the islands of Comoros & Mayotte Eswatini and Lesotho.”

Milhade justified the deal, saying “this is a good opportunity for the country, the soft drinks industry and the business, as the CCBA group has a strong track record on the continent and is committed to sustainable growth where it operates”.

He hastened to say that the transaction is subject to obtaining the necessary regulatory approvals, including approval by the Common Market of East & Southern Africa (COMESA) Competition Commission.

SOBO products

He also assured members of staff that they are a priority to the whole process and that they would be aptly updated of the transaction and processes to be followed.

According to inside sources, the company informed the staff union members that the deal is legal and has been approved by Castel Group in France.

Castel management assured the staff that it was not planning to give any contract termination or retrenchment packages to employees because they want to cash out more on their bonuses once the deal is finalised.

It is reported that Castel Malawi has a policy with Castel Group in France which enables management to claim bonuses on every saving that they make as a percentage.

The sources also say management has taken advantage of the fact that “it takes more than a decade to conclude employment cases in Malawi and by that time they will be gone back to France and someone else will be responsible for that mess.

Employees shall be split between the two companies and any excess staff will not be retrenched to avoid giving them any retrenchment packages instead they will be held at Castel and will be fired one by one through staged disciplinary grounds.

“Almost 99% of staff would like to cross over to the new Coca-Cola company or have their contracts terminated and receive what is due to them because the French have been too hostile to employees ever since they took over from Carlsberg,” said our source.

“They have been removing contractual benefits without employees consultation, using harsh and obscene language, segregation and racism, sexual harassment, prohibiting staff to consume their own product up to the point of making staff to drink water from toilets, prohibiting staff from drinking and eating any type of their own food from the company premises even if you have a medical condition”

The sources hinted that Castel has intentions to sell even the beer business, which is alleged to have been offered to Gerald Bowler of Chibuku.

The source say the employees, through their Union, are seeking a court injunction prohibiting final approval of the sale of part of Castel Malawi business until labour issues are addressed through Ministry of Labour and labour courts.

In September last year, Castel Malawi advertised the sale of the historical head office administration building at Makata Industrial Area in Blantyre, saying it had plans to build a state-of-the-art office complex — which will have all befitting facilities and has gone ahead to.

Also on sale was the Mzuzu depot to be replaced with a new premises, as according to an internal memo for members of staff issued by Human Resources Manager, Naomi Nyirenda.

Nyirenda told the staff then that they had to inform them following the advert the company placed in the media inviting tenders for sale to avoid “speculations” that might arise from the proceedings.

The office complex is on freehold land situated at Plot No. NW438 along Gomani Road at Makata Industrial Area and was being offered in excess of K1.3 billion.

The property extends to approximately 0.3923 hectares and occupies a total gross external floor area of 1,696 square meters. It comprises 3-storey office block and its improvements include a concrete and tarmac-paved driveway and a big car park.

Sources within Castel had said then that the company has been selling a lot of its properties that include residences and staff guest houses across the country.

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