AfDIS turns to small traders
BUSINESS REPORTER
Zimbabwe Stock Exchange-listed spirits and wines maker, African Distillers (AfDIS), has turned to small traders as it makes every effort to capture the American dollars, Business Times can report.
It comes as retail chain stores are paying in Zimbabwe dollars for AfDIS products.
The development was confirmed by company secretary, Lydiah Mutamuko, in a statement accompanying a trading update for the quarter to June 30, 2023.
“The quarter also witnessed a considerable shift of business from formal retail chain stores to smaller traders as the use of US$ currency continued to increase,” Mutamuko said.
According to a trading update for the quarter ending June 30, 2023, AfDIS’s revenue increased by 143% over the prior comparable period, and its American dollar turnover increased by 15% to US$12.5m.
“Revenue growth was due to increased volume and inflation related price adjustments,” Mutamuko said.
AfDIS reported a volume growth of 11% in the period under review, with the Ready-to-Drink segment accounting for the majority of this growth at 26%, thanks to better product accessibility.
Mutamuko said the spirits volume grew by 1%.
She said AfDIS was coming up with strategies to recapture lost market share in the wine market which is under threat of cheap imports.
The company once held a monopoly on the Zimbabwean market, but over the past few years it has suffered a severe setback as a result of the influx of inexpensive imported and illegally smuggled goods that have significantly reduced its market share.
“Wine category volume declined by 13% due to competition from cheaper imported brands and reduced consumer traffic in key account retail chain stores which impacted negatively on demand,” she said.
According to Mutamuko, the business is now concentrating on the affordable market segment as it attempts to reclaim market share from cheaper and illegal goods.
Despite the uncertainties surrounding exchange rates and the availability of utilities, she claimed that the economic environment still offers opportunities for business growth.
Management, Mutamuko said continues to put measures in place to exploit the available opportunities to sustain market share, revenue, and profitability growth.
”The company will focus on product innovation, production efficiencies and cost containment measures,” she said.
