Alcohol volume performances for Delta Corporation Limited’s second quarter declined amid rising inflation and contracting buying power in Zimbabwe.
Earlier policy changes led to a surge in inflation and a fast depreciating exchange rate according to the company’s secretary, Alex Makamure.
“Consumer spending remains low as incomes have lagged the escalation in prices of goods and services,” Makamure said.
“The Southern Africa region has been adversely impacted by shortages of potable water, electricity and
Lager beer volume declined by 40% for the quarter and 48% for the six months compared to the same period last year according to the secretary.
“The Sorghum beer volume in Zimbabwe declined 29% for the quarter and 15% for the six months. The prices of the major inputs; maize, sorghum and packaging materials rose ahead of disposable incomes. This has led to sharper price increases which have resulted in some consumers switching from the category,” Makamure explained.
“The beverages volume at Schweppes Holdings declined by 33% for the half year due to falling consumer demand arising from the pass through effects of cost push inflation. There are challenges in accessing imported raw materials.”
“The Sparkling beverages volume declined 36% for the quarter and 56% for the six months. Volume has recovered in the last quarter on the back of improved product supply and moderated retail pricing. Raw material supply remains a challenge as the category has a high import content. African Distillers (Afdis) recorded a soft volume outturn due to limitations in accessing and the high cost of foreign currency. The entity continues to launch products with a lower foreign currency content,” he went on.
Delta’s Natbrew Zambia’s volume for the quarter compared to last year also went 13% down partly due to higher pricing on the back of a steep increase in maize price and the depreciation of the Kwacha.
“Consumer acceptance of the recently launched returnable pack has been encouraging. Product supply is constrained by capacity and power supply disruptions,” Makamure explained.