Delta cuts beer prices because of weak demand

Delta Beverages has slashed prices for its lager beers by between five and 10 cents from today to offset softening demand, the company said  yesterday.

“The price of the popular pint and quart packs has been reduced from $0.90 to $0.80 and $1.55 to $1.50, respectively.  All other brands and pack prices remain unchanged,” the listed brewer said in a statement.

The general manager for the Lager beer business unit, Munyaradzi Nyandoro said the cuts will improve affordability.

“It is our sincere hope that our consumers will be happy with the early cheer ahead of the festive season,” he said.

Delta, 38 percent owned by global brewing giant SABMiller, has been registering reduced sales in the past two years due to falling disposable incomes that are forcing drinkers to find alternatives to lagers.

Delta reported a four percent decline in revenue to $576.6 million for the full year to March 2015 on depressed sales from both its sparkling drinks and larger beers.

Lager beer volumes were down 17 percent on prior year while soft drinks volumes, comprising both sparkling and alternative beverages, slumped six percent on prior year.

Sorghum beer sales were up eight percent on prior year driven by Chibuku Super with the brand attaining a 50 percent contribution to total volumes by March 2015.

In its audited financial results for the year ending 31 March, the company reported that the rate of decline in sales volume and value had decelerated in the last half of the year following price reductions that improved affordability.

At the time of its financial results announcement in May, Delta said an excise duty rate reduction from 45 percent to 40 percent by government as from 1 January 2015 had helped stem the rate of declining demand.-The Source

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