ZIMBABWE – Delta Corporation Limited, a beverage manufacture in Zimbabwe, has announced a reduction in prices of its soft drinks in a bid to stimulate sales volumes.
According to a Herald report, the company’s secretary, Alex Makamure, noted that the firm reached the decision after recording decline in demand for the products due to the high prevailing market prices.
Mr Makamure noted that despite Delta Corp having sufficient supply for the local market, “the prices that were prevailing in the market were not generating any demand.”
Among the soft drinks prices that the Coca-Cola products bottler has revised include the price of a 330ml can of Coke Zero down to RTGS$1.60; 330ml cans are pegged at RTGS$1.80 while 500ml PET at RTGS$2.15.
“So we are trying to recommend these retail prices to guide the market. We have stock in the warehouse for the past three weeks and the market was not taking it up because the prices were high, the prevailing RTGS prices,” Mr Makamure added.
In its trading update for the fourth quarter and full year ended March 31, 2019, Delta said the sparkling beverages business was “virtually closed during the quarter due to non-availability of imported raw materials”.
The company added that volumes declined by 89 percent compared to prior year for the quarter and decreased by 44 percent for the full year.
“Operations have since resumed albeit at a slow pace. There are ongoing collaborative interventions together with The Cola-Cola Company to restore the business to a sustainable footing.
“The group revenue will reflect an increase of 33 percent for the quarter and 26 percent for the full year,” reads one of the trading update released in April.
Delta said it is still the full impact of the introduction of the inter-bank exchange rates on the group’s financial position is still being assessed.
The company’s full year results are expected to be published on May 16.
The reduction in prices by Delta on the back of waning consumer demand is expected to be adopted by other companies that have increased prices recently in response to the introduction of monetary and fiscal measures.
The Reserve Bank of Zimbabwe has indicated that inflation will decline towards year end as most companies slash prices to stimulate demand.
Consumers in the country have boycotted some products due to a hike in prices which has prompted the government’s intervention.