Larger Beer Volumes Decline By 43%

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By Robert Tapfumaneyi

THE country’s largest beverage manufacturer Delta Beverages’ lager beer volumes declined by 43% in the third quarter of 2019 and by 46% for the nine months compared to the same period in 2018.

In a trading update for the third quarter and nine months from April to December 2019, Delta Beverages said there was focus on supplying key brands and packs and conserving foreign currency.

“The sorghum beer volume in Zimbabwe declined by 41% for the quarter and 25% for the nine months,” Delta Corporation Company secretary Alex Makamure reported in a statement Thursday.

“The category has been adversely impacted by the constrained supply of maize and escalation in the cost of imported inputs such as packaging materials. There is renewed focus on the returnable Scud pack.”

Makamure added: “At Natbrew Zambia, the volume was 32% down for the quarter compared to last year. There are some pricing disparities with other alcohol categories particularly driven by the steep increase in maize prices.

“The Sparkling beverages volume grew by 38% for the quarter and is down 40% for the nine months.”

He went on to say there was a notable volume recovery in response to improved product supply and moderated retail pricing.

“The recently launched ‘No Sugar’ variants have been welcomed by the consumers. African Distillers (Afdis) recorded a volume drop of 10% for the quarter. The demand for ciders and white spirits remains strong.

“There is concern about the illicit trade in some of the product categories.”

The beverages volume at Schweppes Holdings declined by 23% for the quarter due to a shortage of key imported raw materials for both the Mazoe and Minute Maid brands.

“There was an improved performance on the recently launched Fruitade range of products. The entity commissioned the one megawatt rooftop solar plant to mitigate the power outages at the Harare factory during the quarter.”

Makamure said the trading environment was characterised by high inflation and an unstable exchange rate with limited availability of foreign currency in the formal banking channels.

“Consumer spending is constrained by low disposable incomes as salary and wage adjustments continue to lag the increases in prices of goods and services,” he said.

“Our distribution and production operations were impacted by the power outages and constrained fuel supplies.
“The sourcing of imported raw materials and services remains challenging due to the delays in servicing overdue payables.”