Coca-Cola drags distributor to court, wins Shs 412 million

Bukusu Constructors, the distributor of Coca-Cola products in Manafwa district, has been ordered to pay the beverage giant Shs 412 million for breach of contract.

Their relationship started on September 30, 2023, when Coca-Cola appointed Bukusu Constructors as its official distributor in Manafwa district for a period of three years.

Under this agreement, Bukusu was expected to meet strict conditions such as maintaining sufficient capital, paying for products in advance, keeping minimum stock levels, and acting loyally and faithfully towards Coca-Cola.

But things started going wrong in 2024 when the two companies entered a credit arrangement under which Coca-Cola would supply drinks to Bukusu on credit, expecting the distributor to sell the products and regularly deposit the proceeds into the company’s bank accounts.

For a year, Bukusu received goods from Coca-Cola but failed to remit the money as agreed. In addition, Coca-Cola discovered that the distributor had retained some expired products, which it said risked damaging its brand.

Coca-Cola issued demand letters and even suspended Bukusu’s operations while trying to retrieve its stock, but to no avail.

One demand letter specifically asked Bukusu to settle the outstanding debt of Shs 372 million, but the money was never paid.

With no resolution in sight, Coca-Cola dragged Bukusu to court in 2025, seeking a declaration that the distributor had breached the contract and asking for compensation.

The company also wanted either an account of all sales made from April 2024 or payment of the outstanding money, interest, her to, and damages.

The case took a dramatic turn early in the proceedings when Bukusu failed to respond in time.

Court records show that summons were served on the company on November 13, 2025, requiring it to file a defence within 15 days.

But Bukusu did not meet this deadline.

Justice Patience Rubagumya noted that Bukusu’s defence was only filed on February 12, 2026, well outside the legally allowed period and without permission from the court.

She added that such failure is serious in law and as a result, Bukusu’s defence was thrown out, leaving Coca-Cola’s case largely unchallenged.

The matter then proceeded for formal proof, where Coca-Cola presented its evidence through its credit controller, Peter Taire Gwambuga.

Gwambuga told the court that Bukusu had received goods on credit but refused to pay despite repeated demands. He supported this claim with documents, including the distribution agreement, account statements, and demand letters.

Justice Rubagumya accepted this evidence, noting that the amount claimed was not disputed.

“Given the above uncontested evidence, the Plaintiff is hereby awarded special damages of Shs 372 million.

Coca-Cola was represented by lawyer Abudallah Sekibembe of AF Mpanga Advocates.

Bukusu Constructors, on the other hand, did not effectively present its case after its defence was struck out, and no submissions from its lawyers were considered by the court.

Beyond the unpaid debt, the court also considered the broader impact of Bukusu’s actions on Coca-Cola’s business.

Justice Rubagumya agreed that the company had suffered inconvenience and financial strain due to the breach.

She therefore awarded Coca-Cola general damages of Shs 40 million to compensate for these losses in addition to the Shs 372 million.

Coca-Cola was also granted the costs of the suit, meaning Bukusu will have to cover the legal expenses incurred.