Beer and Beverage maker, Delta Corporation’s production volumes have taken a sharp decrease during first quarter (Q1) ending June 30, 2019 on the backdrop of dampened consumer demand and challenges in accessing imported raw materials on time owing to foreign currency scarcity.
The development comes at a time disposable incomes have been drastically eroded in the wake of price hikes and instability in exchange rates.
“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. Our product prices have not yet factored in the full impact of the depreciation of the exchange rate,” said Delta Secretary, Alex Makamure in a statement.
Lager beer volumes plummeted 57 percent as compared to the previous year for the quarter on account of price increases which have adversely affected consumption.
Sparkling beverages volumes also nosedived by 79 percentage points for the quarter following resumption of production.
The company had ceased to produce sparkling beverages fourth quarter of last year due to shortages of raw materials.
“Foreign suppliers remain cautious about Zimbabwe country risk thus compromising the smooth flow of imported materials,” added Makamure.
Interestingly, the company recorded a two percent increase in sorghum beer volumes owing to consistent supply of the commodity on the market but expressed fears of supply cuts of raw materials following a bad farming season for cereals.
Analysts have also attributed the increase in sorghum beer volumes on its affordability to consumers who are now deviating from lager beer which is relatively expensive.
Currently, lager beer is being sold at an average of ZWL$ 10 per quart as compared to ZWL$ 6 for a 2 litre bottle of Super beer.
There are fears the company performance could be worse come second quarter as production is being hampered by power and water cuts.