No Good Cheer For Delta As Zim Imbibers Turn To Cheaper Alcohol

By Sij Ncube

HARARE, January 19, 2016 – ZIMBABWE’s top brewer, Delta Corporation Limited, has reported a marked decline in the sales of beer and other beverages attributed to depressed aggregate demand during the festive season as the harsh economic climate takes its toll on local businesses.

In its trading update for the third quarter ended 31 December 2015 released Monday, the Zimbabwe Stock Exchange-listed company which dominates the local beverages market, reported a general subdued volume and revenue performance for the year under review, blaming the decline to depressed demand in the market.

Lager beer volumes declined by 14% compared to the prior year for the quarter reversing the nascent recovery the previous quarter. The volume is down 6% for the nine months to December 2015.

“The consumer continues to shift to cheaper alcohol categories,” notes Delta Corporation Limited in its latest trade update. Sparkling beverages volume was flat on prior year for the quarter and down 9% for the nine months. But the company notes there some in increase in demand driven by the high temperatures experienced in the period.

Maheu and dairy mix beverages, referred to as alterative beverages, recorded a decline of 7% for the quarter compared to prior year. The decline is partly blamed to supply challenges in November. The alternative beverages category is 5% below prior year for the nine months.

The sorghum beer volume was flat on prior year for the quarter and down 8% for the nine months. Delta says the sorghum category continues to benefit from consumers drifting from other alcohol alternatives and the increased output of Chibuku Super, which remains in short supply.

Group revenue is down 5% for the quarter and is down 7% for the nine months, reflecting changes in the portfolio mix and price moderations during the year.

An increasing number of drinkers are reportedly turning to cheap illicit brews as the economic meltdown take root.

 

Trust Matselele, a South African-based financial and business journalist, told VOP it would be surprising if the sales were up in the wake of the prevailing poor economic climate. “Zimbabweans have been reduced to vagabonds by ZANU PF. The country citizenry cannot afford buying luxuries anymore as they barely afford basics,” said Matselele.