SABMiller bemoans Zim economic decline

HARARE - International brewing giant, SABMiller Plc, has expressed concern over the declining economic situation in Zimbabwe which saw net producer revenue (NPR) of its local unit — Delta Corporation — shrinking by five percent.

In a trading update, SABMiller Plc said challenges continue to persist in Zimbabwe due to the economic environment.

“Soft drinks volume growth of nine percent in Africa was driven by all countries except Zimbabwe, with South Africa and our associate Castel performing particularly well,” said the company.

This comes as the southern African country’s economy has persistently remained in deflation, with the March inflation rate at minus 1,20 percent marginally gaining by 0,19 percentage from minus 1,40 percent in February, according to figures released by Zimstat.

Zimbabwe’s economy is projected by the International Monetary Fund to grow by 2,8 percent this year from an estimated 3,1 percent last year, which is the slowest rate since contraction in 2008.

Economic analysts say the country has been hurt by lower metal prices affecting the mining industry and declining foreign investment.

Meanwhile, Delta Corporation last week said its annual lager beer sales fell 17 percent, the second consecutive year volumes have tumbled as consumer spending wanes in a shrinking economy.

The Zimbabwe Stock Exchange-listed brewer said it was also affected by cheaper imports from neighbouring countries whose currencies are weakening against the United States dollar.

“We report a mixed performance across the beverage categories in an environment of a contracting economy,” the company said in a trading update for the year-ended March.

Delta Corporation — owned 38 percent by global brewing giant SABMiller — will publish its full-year results on May 14.

Soft drinks volumes fell by six percent but sales of sorghum beer grew as consumers shifted to cheaper alternatives.

Sorghum is a type of plant grown in Africa and used for food and biofuels as well as beer.

Market experts say the listed blue-chip counter’s performance in the last quarter was the clearest indicator yet that the economy is not performing well, on the back of poor spending by consumers.

Zimbabwe’s economy has failed to gain traction since the President Robert Mugabe and his Zanu PF party romped to victory under controversial circumstances in the July 31, 2013 harmonised elections.

 

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