Zimbabwe’s Delta Corporation to sell product in foreign currency

ZIMBABWE – Delta Corporation Limited, Zimbabwe’s leading beverage company, has announced adoption of the US dollar pricing system of all its products as a measure of sustaining its operations which have been affected by the prevailing foreign currency shortages.

The management through a public notice said that the current foreign currency shortages in the country have adversely affected the business resulting failure to meet orders.

It noted that soft drinks, for instance, had been out of stock for prolonged periods, acknowledging widespread consumer outcry over the shortage during recent festive season.

“Our business has been adversely affected by the prevailing shortages of foreign currency, resulting in the company failing to meet your orders and in the case of soft drinks, being out of stock for prolonged periods,” said the company.

Despite the government’s efforts to stabilise the currency framework through wider macro-economic policies, delta said that the framework does not provide an easy access to foreign currency by exporters.

“The new fiscal and monetary policy framework in place since October 2018, does not provide for easy access to foreign currency by non-exporters.

The Company has only received limited foreign currency allocations from the banking channels, which have not been adequate to fund the import requirements,” it said.

“Resultantly, all our foreign suppliers are unable to continue providing credit or meet new orders as some of them have not been paid for extended periods,” the company added.

In order to sustain its operations, the company has therefore advised its customers that its products will be charged in hard currency with effect from Friday 4th January 2019.

The company requires US$2 million per month to buy raw materials such as concentrates and granules used to manufacture plastic bottles.

The beverage manufacturer’s company secretary Mr Alex Makamure said selling its products in “multiple foreign currencies” such as the rand, pula, Euro, British pound and US dollars would also enable it to access key raw materials.”

Management noted that despite maintaining a “fair” pricing of its products since 2013, the costs of local materials and services have escalated both in US dollar terms and in Real Time Gross Settlement (RTGS), presumably in response to distorted foreign currency exchange rates.

“The company does not trade on the parallel or black market and does not subscribe to any exchange rate between the USD and the RTGS or bond notes, as they are not currencies,” it said.

Delta said it has invested in excess of US$600 million in plant and equipment, vehicles and ancillary services since 2009 and hence there is a need to protect this investment and ensure sustenance of all value chain partners.

However, it noted the need for wider consultation on policy interventions to build consensus and market confidence among stakeholders to stabilise the macro-economic environment.

“We trust that our customers will continue to charge the recommended retail prices in USD or equivalent currencies based on the multi-currency framework,” said Delta.

Delta Corporation is involved, through its principal subsidiary Delta Beverages, in the brewing of lager and traditional beer and the bottling of soft drinks under licence from the Coca-Cola Company.

Delta Beverages is the country’s leading brewer with more than 15 beer brands and some 4,000-plus employees across the country.

The group’s portfolio includes Castle, Carling Black Label, Chibuku, Chibuku Super, Castle Lite, Redd’s and Castle Milk Stout as well as leading local brands such as Golden Pilsener and Zambezi.

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