Strict Covid-19 restrictions cripples Delta’s subsidiary

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  • Year on year volumes drops by 19%
  • Low sales income affects Delta’s forex earnings
  • Business continues deteriorate as restrictions tighten

Harare- United National Breweries (SA) (UNB), recorded a year on year 19% decline in volumes for the third quarter (Q3) ended 31 December 2020 as strict restrictions and bans on the sale and consumption of alcohol were enacted.

National Breweries Proprietary Limited (UNB) is the manufacturer of Traditional African Sorghum Beer (Umqombothi) in South Africa where Delta Corporation acquired a 100% controlling stake in the company that also runs the Chibuku brand in SA.

In a trading update for the quarter and 9-months period, Delta highlighted that the volume declines were mainly due to Covid-19 restrictions.

 “South Africa has adopted more stringent bans on the sale of alcohol, and reducing the number of trading days and daily operating hours, selling and distribution of beverages was also weighed on by the restriction of movements and social gatherings, closure of on-premise consumption outlets and prohibition of other commercial or social activities that were deemed to pose a risk of spreading COVID-19”, the Group said.

However, the lockdown measures were partially eased during the quarter to 31 December 2020, allowing for a slight increase in business activity albeit with some restrictions on social gatherings and targeted measures limiting the sale or consumption of alcoholic beverages but as the COVID-19 infections rose sharply towards the end of December 2020 the restrictions were once again tightened across the region further crippling the business

Overall, Delta recorded reduced volumes across most segments in the quarter under review as a result of the constrained consumer demand due to low disposable incomes and a harsh operating environment.

In the report Delta stated that business out turn for the fourth quarter will therefore be subdued although the Zimbabwean economy could benefit from improved access to foreign currency and lower inflation.

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