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Delta Beverages resumes sales in RTGS dollars

by Staff reporter
05 Jun 2019 at 07:58hrs | Views
DELTA Beverages has resumed sales in RTGS dollars, citing an improvement in the availability of foreign currency from the interbank market.

The firm, which is the country's largest manufacturer of beverages, requires between US$60 million and US$100 million in foreign currency per annum to import critical raw materials.

The sparkling beverages unit takes up at least 50% of these foreign currency requirements to pay for concentrates as well as packaging materials from external suppliers.

"Following the improvement of foreign currency availability on the interbank market for ongoing operations, we are pleased to offer all our returnable glass packs in RTGS$ with immediate effect. This policy position applies to both beer and soft drinks," reads a notice dated June 4.

"We urge all our wholesale and retail partners to align prices to our suggested price schedule that our sales force constantly communicates."

Beer outlets were demanding as much ZWL$10 for a 660ml bottle, while the standard pint was priced at ZWL$6, but the prices are set to drop to around ZWL$6 and ZWL$3, respectively.

Delta, a heavyweight counter on the stock exchange, accounting for more than a third of the bourse' capitalisation, was over the festive period forced to shut down several of its plants because of foreign currency shortages.

The company reported that it owes foreign suppliers US$41 million and that it was also unable to remit dividends to its foreign shareholders. Anheuser-Busch InBev holds a significant stake in the company through South Africa's SAB Miller.

Delta has in the past complained that the interbank platform was not liquid enough.

In its full-year results released last month, Delta said its lager volumes in 2018 matched record highs achieved in 2013, adding the company could have sold even more clear beer had the economy not suffered a sharp collapse in consumer spending in the last quarter of the year.

Lager volumes grew 31% on prior year, while the sparkling beverages volume declined by 44%.

Commenting on the interbank platform, United Refineries chief executive Busisa Moyo said foreign currency accessibility had improved.

"We have not accessed this much foreign currency directly from the commercial banking sector since May 2016. Our challenge now is that the RTGS dollar is now really hard to find,
whereas customers were keen to prepay and dump the RTGS dollar now they are tightly holding onto it".

The development is most likely linked to recent reports by the central bank that it had begun drawing down on a US$500 million facility from the Afreximbank.

Source - newsday