Sales of beverages dropped by 20 percent in the six months to September due to the shortage of cash during the second and third quarters of this year, the country’s largest manufacturer of beverages, Delta Corporation, says.
Carbonated soft drinks were the worst affected. People were willing to spend money earned largely through informal activities and remittances from Zimbabweans abroad because low interest rates discouraged savings but there was no ready cash with which to undertake transactions.
But all the same Delta saw its sales increase from $34 billion to $142.3 billion, surpassing the sales for the year ending March, which stood at $103.7 billion.
Operating profit increased from $9 billion to $46.7 billion with net profit at $32.7 billion, up from $6.4 billion and $22.4 billion for the year ending March.
The company says though the burden of food imports will put considerable strain on the country’s resources, it was encouraged by the introduction of bearer’s cheques because there had been a surge in demand after their introduction.
It was concerned about the deterioration in industrial relations in the country.
“This generally reflects the crushing impact of inflation on the real earnings of individuals and there is a risk that such activity will become more widespread,” it says. “Industrial action, if it becomes protracted, tends to lead to a reduction in the number of jobs and to lower incomes.”
The company, however, remained positive about the medium term recovery of the economy and had invested in new products that should be introduced to the market.
It was in the process of finalising a major investment in glass production which would ensure supply of this critical component of its business.