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Delta revenues dip on poor lager sales
18/01/2014 00:00:00
by The Source
 
 
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ZIMBABWE’S largest brewer, Delta, has reported a three percent dip in revenue for the third quarter to 31 December due to a softening market that is symptomatic of falling economic activity and disposable income.

Delta Corporation, 38 percent owned by global brewing giant SABMiller, however, said revenues were two percent higher over the nine months to December 31, in line with expectations.

“The country is witnessing a significant slowdown in consumer spending and weak economic activity. This was particularly pronounced in this quarter, the traditional holiday peak period,” Delta said in a trading update.

Zimbabwe’s economy grew by nearly double digit figures from 2009 to 2011 under a unity government between President Robert Mugabe and opposition leader and former prime minister Morgan Tsvangirai of the Movement for Democratic Change.

But it suffered a sharp slowdown in 2012 and in the run-up to the elections in July last year which were won by President Robert Mugabe and his Zanu PF party, extending his 33-year rule by another five years.

The government expects a 6.1 GDP growth this year, but the World Bank says a more modest 4.2 percent is more likely due to a slowdown in key sectors.

Delta said total beverage volumes were flat against the same period last year as weak economic activity and lower consumer spending took their toll, although they were two percent up for the nine months.

Lager beers were 25 percent down on the prior year and 15 percent for the nine months, which Delta attributed to price distortions caused by an increase in excise duty in December 2012.

 “We continue to engage the authorities on the adverse impact of high levels of taxes which drive consumer prices,” the company said.

Sparkling beverages were six percent down on the quarter but two percent higher over nine months.

Its bright spot was the sorghum beer, which recorded an 18 percent growth for the quarter and 12 percent in the nine months driven by the success of Chibuku Super brand. Maheu sales were up 23 percent in the quarter and 42 percent in the comparative nine months.



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