BUSINESS REPORTER
Zimbabwe Stock Exchange-listed spirits and wines maker, African Distillers (AfDIS), says it has come up with strategies to recapture lost market share in the spirit market.
AfDIS used to enjoy monopoly in the market in Zimbabwe.
But, has over the past few years suffered a huge setback following the emergence of cheap imported and smuggled illicit products which have chipped off a significant slice of its market share.
“[Volumes] for the spirits category grew by 19% [in the quarter to December 31, 2022], benefiting from the focus on the affordable market segment as the business sought to regain share from cheaper and illicit products,” company sectary Lydiah Mutamuko said in a trading update.
She said volumes for wines also grew by 16% during the reviewed period, mainly driven by locally produced brands despite intense competition from imports.
Ready to Drink volumes only grew by 3% due to stock supply gaps caused by power outages and regional bottle shortages.
Revenue for the quarter grew by 29% and 39% for the nine months in inflation-adjusted terms over last year due to forex sales which boosted the business.
Mutamuko said the company anticipates revenue growth to be maintained as the company continues to sell affordable products in hard currency.
She said despite improved business activity during the period under review, the economic environment continued to present impediments that constrained business operations.
“Liquidity constraints in ZW$ and power supply outages impacted negatively on operations and consequently on the ability to fully supply the market,” the executive said.
In the outlook, AfDIS has put in place measures to exploit available opportunities to sustain market share, revenue and profitability growth, despite an unstable operating environment and power cuts, Mutamuko said.
She said the company anticipates capitalising on opportunities for growth anchored on increased economic activity resulting from mining, agriculture, infrastructure projects, the forthcoming elections and relaxed Covid-19 restrictions.
