Delta pegs prices in US$
GIANT beverages maker, Delta Corporation Limited, yesterday announced adoption of a United States dollar pricing system for all of its products as a measure to remain afloat on the back of inability to meet orders blamed on prevailing foreign currency shortages.
In a public notice to customers, management said the beverages business has been adversely affected by the prevailing shortages of foreign currency, resulting in it failing to meet orders. It noted that soft drinks, for instance, had been out of stock for prolonged periods, acknowledging widespread consumer outcry over the shortage during Christmas and New Year holidays.
The company also attached a new price list and recommended retail prices, which are all in US dollars.
This is despite the fact that bond notes remain legal tender as well as RTGS as they are officially pegged at 1:1 with the United States dollar. In the new pricing system, a 300ml of soft drink returnable bottle costs US$0,50 a unit and US$9,60 per case. Lagers and beers cost between US$0,80 for a pint and a quart US$1,50 for brown bottle. For a green bottle one will part with US$1 for a pint and US$1,75 for a 660ml bottle. Chibuku super (Batai munhu) has been pegged at US$1 while Maheu now costs between US$0,20 and US$0,50 for a 200ml and 500ml per unit.
Although Government is doing its best to stabilise the currency framework through wider macro-economic policy reforms under the Transitional Stabilisation Programme, Delta said the new fiscal and monetary policy framework in place since October 2018, does not provide for easy access to foreign currency by non-exporters.
“The company has only received limited foreign currency allocations from the banking channels, which have not been adequate to fund the import requirements,” it said.
“Resultantly, all our foreign suppliers are unable to continue providing credit or meet new orders as some of them have not been paid for extended periods. In order to sustain its operations, the company advises the retail and wholesale customers that its products will be charged in hard currency with effect from Friday 4th January 2019.”
Management noted that despite maintaining a “fair” pricing of its products since 2013, the costs of local materials and services have escalated both in US dollar terms and in RTGS, ostensibly in response to distorted foreign currency exchange rates.
“The company does not trade on the parallel or black market and does not subscribe to any exchange rate between the USD and the RTGS or bond notes, as they are not currencies,” it said.
The company said it has invested in excess of US$600 million in plant and equipment, vehicles and ancillary services since 2009. There is a need to protect this investment and ensure sustenance of all value chain partners, it said.
Going forward, Delta said there was a need for wider consultation on policy interventions to build consensus and market confidence among stakeholders to stabilise the macroeconomic environment.
“We trust that our customers will continue to charge the recommended retail prices in USD or equivalent currencies based on the multicurrency framework,” said Delta.
Delta Corporation is involved, through its principal subsidiary Delta Beverages, in the brewing of lager and traditional beer and the bottling of soft drinks under licence from the Coca-Cola Company.
It operates one of the largest distribution network of depots and delivery fleets in Zimbabwe. The company has a significant interest in Schweppes Zimbabwe, which manufactures still and juice drinks under the Coca- Cola franchise.
Delta Beverages is the country’s leading brewer with more than 15 beer brands and some 4 000-plus employees across the country.
The group’s portfolio includes Castle, Carling Black Label, Chibuku, Chibuku Super, Castle Lite, Redd’s and Castle Milk Stout as well as leading local brands such as Golden Pilsener and Zambezi.
Its associate entity, African Distillers, is the leading producer of wines, spirits and ciders. It is the majority shareholder in Natbrew Plc, the LSE listed traditional beer business in Zambia. Delta Corporation is an associate of AB InBev, the world’s largest beer company.