Beer prices are slashed

Finance minister Patrick Chinamasa has slashed exercise duty on clear beer from 45 percent to 40 percent with effect from next year, a move that is likely to further reduce the price of lager beer.

This comes as the country's largest beverages maker Delta Corporation last month slashed the retail price of beer by between 5 cents and 20 cents across the whole portfolio despite beer volumes being depressed as a result of the effects of increased exercise duty in December 2012.

The move impacted negatively on both volumes and retail pricing.

However, Chinamasa's revision of excise duty on clear beer might impact positively on prices.

The Zimbabwe Stock Exchange-listed concern said the company remains focused on its strategy of investing for both volume and revenue growth while focusing on cost containments by improving efficiency and engaging value-chain partners.

Delta brews Castle Lager, Eagle Lager, Lion Lager, Carling Black Label, Golden Pilsener Lager, Bohlingers Lager; traditional beers Chibuku, brewed from malted maize and sorghum, available in 1 and 2-liter  containers and carbonated soft drinks Coca Cola, Fanta, Sprite, Sparletta, Scwheppes.

"Mindful of the need not to undermine recovery efforts by the alcoholic beverage manufacturing industry and also in view of the current depressed aggregate demand for alcoholic beverages, I propose to reduce excise duty on clear beer from 45 percent to 40 percent, thereby stimulating growth in volumes," Chinamasa said.

"As a quid pro quo, alcoholic beverage manufacturers such as Delta Corporation, have undertaken to reduce the retail price. The introduction of bond coins will go a long way to assist towards this effort."

The beer and soft drink company of Zimbabwe, which is part-owned by SABMiller Plc, reported the slump in beer sales, which has become a key tax earner.

Chinamasa also announced that levies on cigarettes would rise.

"Excise duty on cigarettes was last reviewed on 1 December 2012," he said.

"However, the current excise duty rate of $15 per 1 000 sticks does not reflect the social cost associated with consumption of hazardous substances.

"I, therefore, propose to increase excise duty on cigarettes from $15 per 1 000 sticks to $20 per 1 000 sticks, with effect from December 1, 2014.