SOUTH AFRICA – Distell Group, Africa’s leading wines and spirits company has said revenue for the three months ended 30 September 2018 was flat due to single-digit volume declines compared to the prior year, reports Business Day.

The period has experienced a surge in excise duties which have not only affected revenues but also sales volumes as the taxes are finally passed to the final consumer.

According to Opportune Investments CEO Chris Logan, excise duties as a percentage of total revenue have lifted from 18.8% in 2001 to 26.4% in 2018.

Distell said volume was lower in SA because of the higher cost of living and price increases on products a year ago.

Its ready-to-drink products, which include the Esprit range of alcoholic fruit-based drinks, were winning market share from beers, while revenue from spirits remained stable.

“We anticipate a stronger second quarter given festive season demand and cyclical customer orders over this period,” noted the company.

In the first quarter of its 2019 financial year, the group recorded higher volume and revenue growth, led by its businesses in Kenya, Botswana, Zambia, Mozambique and Zimbabwe.

The brewer said it will expand its local production and distribution footprint in the rest of Africa through new investments and joint ventures.

“The group continues to defend and grow its domestic market share, integrate its new African route-to-market acquisitions while creating a more agile and efficient business which aims to enhance margins going forward.”

“Increased commodity pricing should allow commodity-producing countries to improve meaningfully, while investment-led growth will benefit many of the noncommodity-producing countries.”

Distell completed its restructuring and merged with Capevin to re-list on Johannesburg Stock Exchange under a new entity, Distell Group Holdings Limited (DGHL).

Its revenue for the year 2017 increased 10.4% to US$1.69bn on 4.6% rise in volumes.

EBITDA grew by 20.2% while normalised EBITDA, which excludes the impact of the impairments, the profit on sale of investments, the one-off losses in TDL, retrenchment and group restructuring costs, increased by 6%.