A regulatory complaint by a Heineken subsidiary is threatening to disrupt the $2.3 billion acquisition of Diageo’s East African Breweries Limited (EABL) by Japan’s Asahi Group.

In its complaint to the Competition Authority of Kenya (CAK), Kenya Wine Agencies Limited (KWAL) accuses EABL of abusing its dominant market position, and raises concerns that the acquisition could entrench alleged long-standing anti-competitive practices by the brewer.

Three people with direct knowledge of the complaint, including two people working for KWAL, told Semafor that the company wants CAK to review the deal’s potential effects on the market and set conditions for its approval to promote fair competition for smaller players. The regulator acknowledged queries from Semafor regarding the complaint and promised to respond “as soon as possible,” but had yet to do so by the time of publication.

The complaint by KWAL — filed in recent weeks — notes EABL’s sustained dominance across segments including beer and spirits, and highlights several alleged anti-competitive practices by the company, such as abuse of their market power by locking in distributors and suppliers to exclusive agreements that enables them to dictate prices.

“Our fear is that these factors will be amplified should the merger go ahead,” a KWAL source told Semafor, adding that the company wants CAK to put in place conditions to correct EABL’s “abusive dominant position” as the market leader.

The Asahi-Diageo deal, announced in December, is still pending regulatory approvals from the competition authority as well as regulators in Tanzania and Uganda. The transaction is expected to close in the second half of 2026.

KWAL and EABL were yet to officially respond to queries from Semafor regarding the regulatory complaint by the time of publication.