Categories: Stories

Delta hopes tax cut will halt declining sales

Beverage maker Delta Corporation has sounded alarm over the impact of the poor economic outlook on its financial performance, but hopes the recent reduction in excise duty on lagers and the resumption of barley malt exports to Zambia and Mozambique could offset the impact of softening beverage demand.

The government’s decision to reduce excise duty on lager beers, from 45 percent to 40 percent took effect this month.

Company Secretary Alex Makamure said that the company had budgeted $17 million for a new sorghum beer plant in Bulawayo.

Sorghum products have been Delta’s best performing line in the past two years when demand for other beverage types started weakening, but even they also recorded lower volumes in the third quarter to December 2014.

Makamure said Delta is currently engaged in toll malting for regional markets.

“It will take a while to recover from the volume decline registered in the last two years. The economic outlook is not positive, but maybe the price adjustments will arrest the decline,” Makamure said .

“We have capacity to produce 35 000 tonnes of malt of which half is absorbed in the domestic market. We are currently toll malting barley for Zambia hence the capacity is available for pure exports at about 8 000 tonnes per annum. The malt prices fluctuate in sympathy with international markets.”

Delta Corporation revenue for the third quarter to December was down 10 percent on weakening demand for its product mix, the company said on Tuesday, warning of lower profit margins.

Lager beer volumes for the third quarter to December were down nine percent on weakening consumer spending.

Soft drink volumes for the period under review were also down five percent while sorghum beer, which lately had shown strong volume growth, was down one percent due to constrained brewing capacity and utility outages.- The Source

(175 VIEWS)

Charles Rukuni

The Insider is a political and business bulletin about Zimbabwe, edited by Charles Rukuni. Founded in 1990, it was a printed 12-page subscription only newsletter until 2003 when Zimbabwe's hyper-inflation made it impossible to continue printing.

Recent Posts

Can the ZiG sustain its rally against the US dollar?

Zimbabwe’s battered currency, the Zimbabwe Gold, which was under attack until the central bank devalued…

November 10, 2024

Will Mnangagwa go against the trend in the region?

Plans by the ruling Zimbabwe African National Union-Patriotic Front to push President Emmerson Mnangagwa to…

October 22, 2024

The Zimbabwe government and not saboteurs sabotaging ZiG

The Zimbabwe government’s insatiable demand for money to satisfy its own needs, which has exceeded…

October 20, 2024

The Zimbabwe Gold will regain its value if the government does this…

Economist Eddie Cross says the Zimbabwe Gold (ZiG) will regain its value if the government…

October 16, 2024

Is Harare the least democratic province in Zimbabwe?

Zimbabwe’s capital, Harare, which is a metropolitan province, is the least democratic province in the…

October 11, 2024

Zimbabweans against extension of presidential term in office

Nearly 80% of Zimbabweans are against the extension of the president’s term in office, according…

October 11, 2024