Delta renews three-year bottlers contract agreement with The Coca-Cola Company

ZIMBABWE – Delta Corporation Limited, a leading beverages producer in Zimbabwe has renewed the bottlers agreement with The Coca-Cola Company (TCCC) to run for the next three years.

Delta had been trading under a cautionary issued after TCCC announced its intention to terminate the bottlers agreement 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.

The renewal effectively nullifies the cautionary notice that had been issued to stakeholders.

In a trading update for the third quarter and nine months to December 31, 2019, Delta’s company secretary, Alex Makamure, said the new contract will run up to September 2022.

“Following the engagements amongst the parties, shareholders are advised that the bottler agreement with The Coca Cola Company has been renewed for a three year-term to September 2022,” Makamure said in a trading update for the third quarter and the nine months to December 31, 2019.

Sparkling beverages volume grew by 38% for the quarter and was down 40% for the nine months to December 2019.

Larger beer volumes declined 43% for the quarter and 46% for the nine months compared to the same period in the prior year.

Delta said it has had to cut back on lager beer production during the period under review.

“Consumer spending is constrained by low disposable incomes as salary and wage adjustments continue to lag the increases in prices of goods and services,” said Delta in its trading update.

Production of sorghum beer was also lower during the period under review as it was “adversely impacted by the constrained supply of maize and escalation in the cost of imported inputs such as packaging materials.

“The Sorghum beer volume in Zimbabwe declined by 41% for the quarter and 25% for the nine months,” Delta said.

Delta’s regional operation, Natbrew Zambia also recorded volume declines, at 32% lower from the prior comparable quarter.

African Distillers (Afdis) recorded a 10% volume drop for the quarter with the group raising concern over imitation products on the market. However, demand for ciders and white spirits remained strong.

Beverages volume at Schweppes Holdings declined 23% for the quarter due to an outage of key imported raw materials for both the Mazoe and Minute Maid brands; but performance of the recently launched Fruitade range of products was positive.