Delta grapples with a dip in FX earnings
LIVINGSTONE MARUFU
Delta Corporation Limited, the country’s largest brewer, is grappling with a dip in forex earnings from domestic sales since the introduction of the Zimbabwe Gold (ZiG) in April this year, company secretary Faith Musinga, has said.
She said the amount of forex collected from sales in the quarter to June 30, 2024 decreased to 65% from 80% in the prior comparative period.
The situation, according to Musinga, has been exacerbated by the difficulties in obtaining forex from the official market.
It comes at a time when business lobby groups including the Confederation of Zimbabwe Industries and the Zimbabwe National Chamber of Commerce, have engaged the Reserve Bank of Zimbabwe regarding the inefficiency of the interbank system.
“Collections of foreign currency through domestic sales have declined from an average of 80% in the prior year to 65% following the introduction of the ZiG currency and the strict enforcement of dual pricing at official exchange rates in the formal retail sector,” Musinga said.
She added: “While some modest gains have been realised through the willing buyer, willing seller arrangement, this area remains a key focus in accessing the much-needed foreign currency to meet the group’s requirements and the deployment of the increased ZiG inflows.
“Ensuring the availability of foreign currency to support imported inputs will be crucial for sustaining the industry,” Musinga said.
In the period under review, the lager beer sales volume grew by 9% compared to the previous year due to strong demand and a consistent supply of brands and packs.
Sorghum Beer Sorghum beer volume in Zimbabwe, however, declined by 10% for the quarter compared to the previous year due to the cessation of exports to regional markets following the completion of capital projects in those countries and the onset of the drought.
The category is also impacted by competition from hard spirits, our own increased lager beer supply, and investments by competitors in the same category.
The sorghum beer category is the most affected by the drought due to lower consumer disposable incomes in rural markets and cost pressures on key cereals such as maize and sorghum.
Musinga said the penetration of Chibuku Super into new trade channels and the recruitment of new consumers is encouraging and the carbonated product offering has been expanded to include regional brands.
African Distillers Limited (Afdis) recorded a volume growth of 6% for the quarter compared to the previous year, benefiting from improved product supply and some price moderations, however, there is concern about the increase in informal imports and the prevalence of illicit offerings.
