Share

Zim alcohol consumers switch to cheaper spirits

Harare - Although lager beer volumes in Zimbabwe have been on the decline, alcoholic consumers in the country are increasingly switching to cheaper alternatives in the form of ciders and spirits, the local unit of SA spirits maker, Distell said on Thursday.

Distell jointly owns Zimbabwe’s African Distillers (Afdis) together with SABMiller [JSE:SAB] associate unit, Delta Corporation, which is the biggest beverages maker in the southern African country. Afdis manufactures ciders and spirits such as Viceroy but competes with other imported and cheaper brands.

Delta has over the previous quarters reported declining volumes for its lager beer, with profits also taking a knock although the premium lager beer segment has remained somewhat resilient according to officials.

Delta said in its report for the same period that only its sorghum based opaque Chibuku category remains strong. “The (Chibuku) category continues to benefit from consumers drifting from other alcohol alternatives and the increased output of Chibuku Super, which remains in short supply,” the company said last month.

However, Afdis has seen volumes go up by 2% to 3.9m liters in the half year to the end of December although turnover for the period was 8% lower at $19m.

“The spirit business recorded a decline in volumes against last year, however cider and wine volumes continued to grow, registering an increase of 27% and 19% respectively, Pearson Gowero, chairman of Afdis said.

The company said despite the volume increase, headline earnings declined by 2% to 1.48 cents. The company, which Distell regards as a value proposition, paid as much as $6.5m to the government in taxes during the half year period.

Afdis has now earmarked new product launches, brand extensions and enhanced retail strategies as measures to spring-off to profitability. It will also, just like other companies in Zimbabwe, continue to contain costs.

“Consumer spending patterns continue shifting towards the lower priced products. The (financial) decline (for the period) was compounded by price reductions effected during this period aimed at stimulating demand and maintaining competitiveness,” added Gowero.

Afdis is increasingly focusing on the Africa region to boost its prospects and reported last year that the wine segment was stable while there had also been robust strength in the cider category.

“I would really love to see Distell doing an international deal that would take their cider brands beyond Africa. Any opportunities to sharpen up our business will be looked at,” Distell chief executive officer, Richard Rushton said last year.

We live in a world where facts and fiction get blurred
Who we choose to trust can have a profound impact on our lives. Join thousands of devoted South Africans who look to News24 to bring them news they can trust every day. As we celebrate 25 years, become a News24 subscriber as we strive to keep you informed, inspired and empowered.
Join News24 today
heading
description
username
Show Comments ()
Rand - Dollar
18.96
-0.3%
Rand - Pound
23.91
-0.1%
Rand - Euro
20.48
-0.1%
Rand - Aus dollar
12.34
+0.1%
Rand - Yen
0.13
-0.2%
Platinum
896.95
-1.0%
Palladium
1,000.11
-0.2%
Gold
2,194.20
-0.0%
Silver
24.51
-0.6%
Brent Crude
86.09
-0.2%
Top 40
68,007
+0.5%
All Share
74,221
+0.4%
Resource 10
56,323
+1.2%
Industrial 25
103,552
+0.3%
Financial 15
16,559
+0.2%
All JSE data delayed by at least 15 minutes Iress logo
Company Snapshot
Editorial feedback and complaints

Contact the public editor with feedback for our journalists, complaints, queries or suggestions about articles on News24.

LEARN MORE
Government tenders

Find public sector tender opportunities in South Africa here.

Government tenders
This portal provides access to information on all tenders made by all public sector organisations in all spheres of government.
Browse tenders