Cheers! Chinamasa slashes beer prices

Patrick Chitumba Senior Reporter
FINANCE Minister Patrick Chinamasa offered no quick solutions to Zimbabwe’s economic problems in his 2015 budget speech yesterday, but he pulled a populist move by slashing duty on beer which will trigger price cuts.

Chinamasa cut excise duty on clear beer by five percent and announced an imminent reduction of beer prices beginning in January 2015.

The minister told Parliament that the move was aimed at stimulating growth in the volume of sales for beer.

Delta Corporation, Zimbabwe’s leading beer maker, says it will reduce the retail price for beer in response.

Chinamasa said excise duty would be reduced from the current 45 percent to 40 percent in January next year — one of a few “feel-good” measures in a sobering $4,1 billion budget statement dominated by warnings over out-of-control government expenditure, falling revenues from mining and high imports.

He told MPs: “Mindful of the need not to undermine recovery efforts by the alcoholic beverage manufacturing industry, and also in view of the current depressed aggregate demand for alcoholic beverages, I propose to reduce excise duty on clear beer from 45 percent to 40 percent, thereby stimulating growth in volumes.

“As a quid pro quo, alcoholic beverage manufacturers such as Delta Corporation have undertaken to reduce the retail price. This measure takes effect from January 1, 2015,” he said.

Delta last reviewed the prices of beer across the whole portfolio in response to the declining large volumes due to low disposable income in September this year.

Currently a magnum 660ml returnable bottle for Golden Pilsener, Zambezi Lager and Bohlingers is selling at $1,75.

Most beer outlets in the country tend to price the 375ml returnable bottle (pint) at $1, despite Delta Beverages recommended retail price of 95c.

In the financial year ended March 3, 2014, Delta reported that lager volumes had declined by 18 percent due to waning demand.

Delta controls about 96 percent of the beer market and about 92 percent of the sparkling beverages in the country.