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Harare - Zimbabwe’s biggest beverages company Delta Corporation, which has a 98% market share, on Wednesday reported declining revenues for the half-year to end-September 2015.
Revenue for the period was down 8% to US$269.0m from $291.5m prior year comparative.
The revenue drop could have been more pronounced had the company not resorted to reducing prices in an effort to stimulate consumer demand. Despite this move, total beverage volumes still went down by 10%.
Demand has been on the decline for quite a while now as consumers literally sober up in the pocket.
Commenting on the results, management said the trading environment remains difficult due to pressure on discretionary spending and the resultant depressed consumer demand.
“Of particular note is the impact of the escalation in job losses, wage and salary cuts, delayed wage payments and uncertainties about pay dates,” said chairperson Canaan Dube in a statement.
He added that “the country continues to lose competitiveness due to delays in implementing policies that would encourage correction of price distortions in the face of weakening regional currencies”.
His sentiments were echoed by CEO Pearson Gowero, who said the strong US dollar in use in Zimbabwe has caused an increase in imports from regional markets.
He added that some foreign companies were not necessarily looking for market share but were only pushing products into Zimbabwe in search of the dollar.
Delta, which is listed on the Zimbabwe Stock Exchange, is 38% owned by SABMiller [JSE:SAB] and will be introducing the latter’s brands such as Flying Fish, Castle Lite Lime and Castle Draught in an effort to retain consumers within its product portfolio.
