ZIMBABWE’S dominant beverage manufacturer, Delta Corporation, has expressed concern over the newly implemented sugar tax, fearing it will exacerbate existing market distortions and potentially dampen sales.
Introduced alongside a broader fiscal package in January, the levy of sugar is anticipated to translate into unavoidable price hikes for Delta’s products.
This, the company warns, will compound pre-existing market imbalances, raising worries about the sector’s health.
“The sector will be adversely affected by the unavoidable price increases arising from the introduction of the sugar tax,” Delta stated in its latest trading update.
“This will be in addition to the pricing distortions that have prevailed in the market,” the company added, highlighting further anxieties regarding policy restrictions impacting distribution channels.
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The group said this reflects the volume growth across business units, with the proportion of US dollar sales averaging above 70 percent for the year.
The lager beer business has maintained the volume growth momentum and has surpassed historical monthly peak volumes to achieve a growth of 15 percent for the quarter and 14 percent for the nine months compared to prior year.
In Zimbabwe, sorghum beer total volume, including exports, grew by three for the quarter and is up four percent for the nine months, off a high prior year base.
The volume at United National Breweries South Africa grew by 10 percent during the quarter and is up three over prior year for the nine months.
Natbrew Plc (Zambia) recorded a volume growth of 23 percent for the quarter and grew by 50 percent for the nine months.
The sparkling beverages volume recovery momentum persisted, registering a growth of 38 percent for the quarter and 25 percent for the nine months compared to the prior year.
African Distillers registered a sluggish performance in the quarter with volume declining by 12 percent compared to prior year due to an increase in grey trade on key brands and reduced uptake by the formal trade partners.
Schweppes recorded a volume growth of 16 percent over prior year for the quarter benefiting from the commissioning of the new plant supplying bottled water and Minute Maid Juice Drinks in November 2023.
Nampak Zimbabwe volumes for the quarter were eight percent ahead of prior year across all businesses, benefitting from increased exports of paper products and the higher pull of plastic packaging from the beverages sector.
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