SA’s alcohol sales ban hit Distell’s Q12021 Group performance

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Distell Group: A few of our products
  • Volume and revenue declines in the mid-teens recorded in S.A.
  • Group registered low single-digit revenue and low double-digit volume declines
  • Performance in the rest of Africa excluding BLNE countries was positive

Harare- South Africa’s second ban on alcohol sales in July 2020 had a negative impact on Distell’s revenue and sales performance in the first quarter of FY2021 (1 July to 30 September 2020).

Distell stated that the effects of the ban in South Africa which is the its biggest market on the Group’s performance in the period under review was more pronounced with volume and revenue declines in the mid-teens although the declines should be seen in the context of a 38% loss in trading days in the quarter due to the ban on alcohol sales.

The ban has since been lifted subject to certain trading restrictions which currently remain in place.

The unit’s overall performance and cash generation are however ahead of expectations and show a positive trajectory into the first half of FY2021 as the business recovers demand and adjusts to the revised trading conditions.

“Category performance continues to reflect changing consumer trends, with a preference towards spirits and mainstream wine driven by in-home consumption. Select premium ready-to-drink (RTD) brands also continue to perform well. The on-premise market is starting to gradually open up and recover, with projected trends in small business closures being better than anticipated. This bodes well for a better than expected industry recovery”, the Group said.

The Group recorded a low single-digit revenue decline and a low double-digit volume decline in the first three months of FY2021.

Distell’s performance in its other operations in Africa, excluding the BLNE countries was impressive as strong double-digit revenue and volume growth was recorded as compared to the prior comparative period.

The positive performance is said to have been driven by Kenya alongside all priority countries recording positive revenue and volume growth.

The Group added that performance in Africa including BLNE countries (Botswana, Lesotho, Namibia and Eswatini) was more muted with mid-teen double-digit improvement in both revenue and volume growth, driven by the lockdown measures imposed in Namibia and Botswana.

In spite of the early effects of COVID-19 on Global Travel Retail (GTR) and exports, Distell’s international business recovered strongly across all markets with double-digit revenue and volume growth led by the exceptional growth of premium whisky brands and Amarula.

The Group said it has a resilient balance sheet, with strong cash generation ability, underpinned by the recent consolidation and investments into making its production network more efficient

Distell operates in Zimbabwe through an indirect shareholding in African Distillers (AfDis)

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