Delta cuts prices of soft drinks

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ZIMBABWE Stock Exchange listed beverages manufacturer, Delta Corporation, has reduced prices of soft drinks in a bid to stimulate demand, which had markedly declined in the last few months as consumers could not afford the high prices.

A 300ml returnable soft drink’s new recommended retail price is RTGS$1,25, down from almost RTGS$1,80. The price of a 330ml can of Coke Zero is down to RTGS$1,60; 330ml cans are pegged at RTGS$1,80; 500ml PET (RTGS$2,15); returnable 1 litre (RTGS$3,60); while the 2 litre PET is now RTGS$6,40).

Delta company secretary Alex Makamure told The Herald Business yesterday that demand for the products had gone down as consumers could not afford them, hence the decision to reduce prices.

Mr Makamure said Delta has had soft drinks in stock for the past three weeks, with both retailers and wholesalers not buying the product given the low demand.

“Drinks are not in short supply; there was an issue of production in the past but I am saying the reality is that the prices that were prevailing in the market were not generating any demand,” said Mr Makamure.

“So we are trying to recommend these retail prices to guide the market. So the issue of availability is one thing; we have stock in the warehouse for the past three weeks and the market was not taking it up because the prices were high, the prevailing RTGS prices.”

In its trading update for the fourth quarter and full year ended March 31, 2019, Delta said the sparkling beverages business was “virtually closed during the quarter due to non-availability of imported raw materials”.

The company added that volumes declined by 89 percent compared to prior year for the quarter and decreased by 44 percent for the full year.

“Operations have since resumed albeit at a slow pace. There are ongoing collaborative interventions together with The Cola-Cola Company to restore the business to a sustainable footing.

“The group revenue will reflect an increase of 33 percent for the quarter and 26 percent for the full year,” reads the trading update released on  April 25.

Delta said it is still the full impact of the introduction of the inter-bank exchange rates on the group’s financial position is still being assessed.

The company’s full year results are expected to be published on May 16.

The reduction in prices by Delta on the back of waning consumer demand is expected to be adopted by other companies that have increased prices recently in response to the introduction of monetary and fiscal measures.

The Reserve Bank of Zimbabwe has indicated that inflation will decline towards year end as most companies slash prices to stimulate demand.

Retailers complained recently that business was almost at a standstill as consumers boycotted unjustified prices increases.