ZIMBABWE – Delta Corporation Limited, a beverage manufacture in Zimbabwe has reported a decline in its performance for the half year period ended September 2019 on the back of declining sales.
The company saw a 40% tumble for the quarter and 48% for the six months in lager beer volumes compared to the same period last year affected by the fundamental changes to the economy arising from the recent fiscal and monetary policy shift.
Zimbabwe shifted from the multi-currency trading and reverted to the Zimbabwe Dollar as the sole trading currency at the end of June 2019.
The policy changes have led to a surge in inflation and a fast depreciating exchange rate. Consumer spending remains low as incomes have lagged the escalation in prices of goods and services.
Its sorghum beer volumes fell by 29% for the quarter and 15% for the six months to September as consumers switched from its products due to the rise of major input prices, leading to sharp increases of beer prices.
Delta’s Sparkling beverages volumes also plunged by 36% for the quarter and 56% for the half year.
In a trading update, the beverage manufacturer said that it had to moderate prices to maintain the affordability of their products.
“The company had to implement modest, but frequent price increases in response to the inflationary pressures while taking into account the affordability issues affecting the consumers,’’ stated Alex Makamure the company secretary.
“The pricing has been moderated to maintain affordability given the prevailing economic challenges,” he added
Delta further indicated that it is struggling to source raw materials and services due to the unstable performance by the interbank market and that foreign remain jittery on account of overdue payables.
At its National Breweries Plc unit (Nat brew) Zambia, volumes declined by 13% due to input price increases and the devaluing of the country’s currency, kwacha.
Schweppes Holdings struggled to access raw materials, resulting in a 33% decline in volumes during the six months to September.
African Distillers recorded a soft volume outturn due to limitations in accessing and high cost of foreign currency.
The company also noted that it was trading under a cautionary issued with respect to the notice received from The Coca-Cola Company (TCCC) advising of an intention to terminate the Bottler’s Agreements with the group entities.
This followed the merger of AB InBev and SABMiller Plc in October 2016 and the subsequent agreement in principle reached between TCCC and AB InBev to explore options to restructure the bottling operations in a number of countries.