Delta seeks authority to extend Coca-Cola franchise to Manicaland

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By Alois Vinga

BEVERAGES giant, Delta Corporation Limited is seeking to extend the Coca-Cola franchise to Manicaland with discussions to strike the deal almost reaching finality.

Delta chairman, Canaan Dube this week revealed that negotiations were underway to extend sparkling beverages franchise.

“The company is finalising discussions with the Coca-Cola Company for the extension of the sparkling beverages franchise territory to include Manicaland and has entered an agreement to purchase the bottling assets of Mutare Bottling Company (MBC). The transaction is subject to regulatory approvals,” he said.

Dube said the development will allow Delta to leverage on its scale and combined asset base to meet the sparkling beverages demand across the country.

The company was founded in 1950 by the Goldberg family which now owns a minority stake in the business through an investment vehicle called Northunderland Investments.

Since 2007, MBC’s 69 % stake has been controlled by Econet Wireless Zimbabwe through Pentamed Investments, including a 6 percent shareholding in the form of convertible instruments. The remainder is owned by the Goldberg family.

Meanwhile, during the six months period ended September 2020, the Delta reported revenue of $10.6 billion to achieve a 910% growth in the comparative year on inflation adjusted terms. Such revenue growth was driven by inflation induced pricing across all product categories.

Earnings before interest and tax grew by 955% over last year while finance costs of $145 million were driven by foreign exchange losses.

Lager beer volumes grew 3% compared to the same period last year reflecting growth of 18% in the second quarter, reversing the sharp decline recorded in the first quarter when the Covid-19 restrictions were at their peak.

The sorghum beer volume declined by 31% compared to the same period last year due to the limited access to key trade channels such as bars, bottle stores and the rural markets during lockdown particularly in the first quarter.

Sparkling beverages volume grew by 22% over last year, albeit from a low base. The business continues to recover market share on the back of consistent product supply and competitive pricing.