Schweppes Africa maintains beverage prices despite sugar tax reduction
ZIMBABWE – Schweppes Holdings Africa has stated that prices of its sugary beverages will remain unchanged despite a recent reduction in Zimbabwe’s sugar tax, citing persistent cost pressures, including rising fruit and sugar prices.
The sugar surtax, initially imposed at US$0.02 per gramme on both ready-to-drink and cordial beverages, was later reduced to US$0.001 per gramme following industry concerns.
In the 2025 National Budget, Finance, Economic Development, and Investment Promotion Minister Mthuli Ncube further lowered the levy on cordials to US$0.0005 per gramme, effective January 1.
However, Schweppes has indicated that production costs remain elevated, limiting any possibility of retail price reductions.
Delta Corporation, a major shareholder in Schweppes, revealed in its latest trading update that the sugar tax had contributed to a 27 percent decline in Schweppes’ sales volume for the third quarter ending December 31, 2024, and a 17 percent drop over the nine-month period.
“The reduction in the sugar tax from January 2025 is a welcome development, although there are significant cost pressures such as the rising juicing fruit and sugar prices, which limit the opportunity to moderate retail prices,” said Delta Corporation company secretary Ms. Faith Musinga.
In addition to sugar tax implications, Delta also reported a 10 percent to 33 percent price increase across various beverage categories, which slowed consumer demand.
The introduction of the sugar tax last year made local products more expensive, leading to an influx of cheaper imported alternatives, particularly informal imports of Schweppes’ flagship Mazoe Orange Crush from regional markets such as Zambia.
Despite the tax reduction, government data shows that between February and December 2024, US$31.2 million was collected from sugar tax on sparkling beverages and cordials.
The levy is part of broader government efforts to curb excessive sugar consumption linked to health risks such as obesity, type 2 diabetes, and heart disease. Proceeds from the tax are earmarked for healthcare initiatives, including cancer treatment and medical equipment procurement.
Meanwhile, Schweppes Zimbabwe Limited (SZL), a subsidiary of Schweppes Holdings Africa, has made significant investments to enhance its production capabilities.
The company recently installed a state-of-the-art non-returnable PET line at its Willowvale plant in Harare.
The new facility features advanced technology, including the InnoPET BloFill stretch blow molder/filler block, capable of producing 36,000 containers per hour, alongside high-efficiency labeling, packing, and palletizing systems.
Since installation, production capacity has surged by 300%, prompting SZL to consider expanding its warehouse facilities.
In August 2024, Schweppes invested US$28 million in a citrus project to stabilize Mazoe Orange Crush supply and expand into Botswana, reinforcing its commitment to long-term growth and market expansion.
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