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Business Writer
Delta’s sales volumes for the first quarter to June 2019 tumbled as market players priced products beyond the reach of cash-strapped consumers.
Lager beer volume, for the quarter, declined by 57 percent compared to prior year.
Demand was subdued on account of affordability issues as “market players adopted varied pricing models,” Delta said in a trading update released this week.
The market has been experiencing price distortions as players adopted pricing models that were to some extent speculative and in some cases meant to hedge against inflationary pressures.
The macro-economic changes have led to a surge in inflation and a fast depreciating exchange rate which have resulted in the erosion of disposable incomes and reduced consumer spending.
Inflation for the period was between 76 percent in April and 176 percent in June 2019.
This is at a time its product prices “have not yet factored in the full impact of the depreciation of the exchange rate”.
The exchange rate depreciated from 1:3 to 1:8.9 between the US dollar and the local currency.
Delta also recorded a significant drop in the Sparkling Beverages business were volume declined by 79 percent for the quarter.
The business has, however, resumed full production following an extended period of shut-down due to shortages of imported raw materials.
The Sorghum beer volume in Zimbabwe grew by 2 percent versus prior year for the quarter.
“Product supply has been consistent despite the difficulties in accessing imported packaging materials and services,” said Delta.
There are however concerns about the supply of agricultural cereals arising from the drought and the recent changes to the marketing policies.
Online Reporter