‘Coca-Cola to drop Zim beer company’
SABMILLER Zimbabwean union Delta Corporation said it had been informed that The Coca-Cola Company intended to terminate its contract with the company that manufactured lager beer brands and soft drinks in the country.
The Coca-Cola Company owns trademarks for the manufacture of soft drinks such as Coke, Fanta and Sprite among others.
It also holds other brands for ready-to-drink products, such as Minute Maid that Delta manufactures in Zimbabwe, through an associate company called Schweppes Zimbabwe.
The intended termination of Delta Corporation’s soft drinks manufacturing agreements with The Coca-Cola Company comes in the wake of the merger deal between SABMiller and Anheuser-Busch (AB) InBev, which is expected to be finalised this month.
“Further to a statement issued to stakeholders… relating to the combination of AB InBev and SABMiller, the company has since been notified by The Coca-Cola Company of its intention to terminate the Bottlers’ Agreements with Delta Beverages and its associate Schweppes Holdings Africa Limited,” Alex Makamure, the secretary for Delta Corporation, said on Friday.
Makamure said the move could have material impact on the company’s business.
The soft drinks division performed better in the quarter to September for Delta, with volumes up 3 percent on the prior contrasting period.
However, on a half yearly basis to the end of September, the division was down by 3 percent. “The company is considering the ramifications of the Notified Intention. No changes to the operations of the company and its associates are anticipated at this time,” Makamure added.
Material change
The latest development will mark the first material change to Delta’s operations, which are the largest brewing and soft drinks manufacturing in Zimbabwe. Reports suggested last week that Coca-Cola also planned to buy out AB InBev from an African bottling joint venture originally agreed to with SABMiller.
Bloomberg reported that according to HSBC analysts, AB InBev’s ultimate goal was the possible acquisition of Atlanta-based Coca-Cola, according to a note issued last month.
Cash shortages in Zimbabwe have also forced Delta Corporation – and other companies – to delay the commissioning of two new plants in Kwekwe and Masvingo as outbound remittances from Zimbabwe taking longer to effect.
The company now anticipates that the new plants will start contributing to production before the end of this year.
“The shortages of foreign currency resulted in reduced importation of consumer goods leading to an increase in demand for some of our product lines,” Delta said.