Harare, (New Ziana) – Beverages producer, Delta Corporation said on Thursday limited consumer spending towards the end of last year impacted volumes across product lines, a period the firm usually records high sales.
In its trading update for the quarter ending December 2019, Delta said most categories of its products including lager beer, sorghum beer, wines and spirits recorded a decline in volumes except for sparkling beverages, normally referred to as soft drinks on the local market, which went up 38
Lager beer sales slid 43 percent, sorghum beer sales by 41 percent while wines and spirits volumes declined 10 percent compared to the previous quarter.
“Consumer spending is constrained by low disposable incomes as salary and wage adjustments continue to lag the increases in prices of goods and services,” Delta Corporation said.
Power outages, fuel shortages and limited foreign currency availability also hit the company’s production and product distribution levels and capacity.
Despite the decline in sales, Delta said it had recorded a jump in revenues mainly driven by product price increases.
“The revenue for the quarter grew by 27 percent in inflation adjusted terms (646 percent historical) reflecting the changes in product mix and price increases that are based on replacement cost,” the firm said.
The firm said it had introduced new products on the market including the “No sugar” soft drink variety which it said had been welcomed by the market.
“The entity commissioned the one mega watt rooftop solar plant to mitigate the power outages at the Harare factory during the quarter,” Delta Corporation said.
The company expects the outlook to be tough with production of sorghum beer likely to be impacted by drought.