Imbibers must think long and hard

HARARE - Following the announcement by Delta Corporation Limited — the Zimbabwean company part owned by Anheuser-Busch InBev — to only accept hard currency for its beverages, it appears the future of beer pricing is still far from certain, with factors such as foreign currency availability being an ongoing concern for many in the industry.

Even after the government intervened a day after the measure was announced and forced Delta to abandon a plan to only sell its beverages in hard currency, there has been steep increase in the price of clear beer — by more than 100 percent.

The price increases for beer have left more and more consumers believing that going to the pub is now a luxury.

A number of retail outlets have hiked prices of lager beers with a 375ml bottle now retailing at $3, 50 from $1, 50, while a 750ml bottle which was initially pegged at $2, 50, is now selling at between $6 and $8.

This will no doubt cool down beer consumption in pubs. The current economic climate is creating a depressing environment for the pub trade. 

Beer sales will certainly suffer a drop, probably the worst since independence in 1980.

Opinion on what can be done to reverse this situation varies across the industry. 

It would be churlish not to say it’s a positive move by the Reserve Bank of Zimbabwe governor John Mangudya to provide the foreign currency required to ensure that Delta continues to trade on the current basis. Will the governor walk the talk?

Will he actually provide Delta — with a market value of $3,6 billion and 23 percent owned by the world’s biggest brewer — the required foreign currency?

As it is, the skint government cannot even raise money to buy fuel imports.  It’s even failing to stem a rolling civil service strike because of a critical funding shortfall.

The current pricing structure will adversely affect pubs in particular, which have no alternative sources of revenue aside from selling drinks.

They will lose most of their drink trade. Perhaps they can diversify into food, as they can no longer rely on their core drinking clientele, which is set to evaporate. 

Yes, beer is a habit-forming commodity, and they say its demand is inelastic despite changes in the pricing structure, but under this harsh economic environment, imbibers will have to think long and hard before downing the so-called wise waters.

It is inevitable that more pubs will close, but on a positive note, perhaps, this marks an upside for casual dining chains.

If prices don’t come down, more and more pubs are going to close, as they won’t be able to make ends meet. It’s a really harsh environment out there.

Comments (1)

It's really a harsh situation whose final outcome is difficult to predict. Most tax-payers have since stopped watching DStv, buying oatmeal, reducing on bread, margarine and milk, cutting back on meat, spaghetti, rice and cooking oil. Now a small outlet for misery has also now been closed. Surely the number of angry people now far exceeds the total number of voters in the last election? What does this mean?

Sagitarr - 8 January 2019

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