Harare – Zimbabwe Stock Exchange listed blue chip counter Delta Beverages says the Company is trading under a cautionary issued with respect to the notice received from The Coca-Cola Company (TCCC) advising of an intention to terminate the Bottler’s Agreements with the Group entities (Notified Intention).
This followed the merger of AB InBev and SABMiller Plc in October 2016 and the subsequent agreement in principle reached between TCCC and AB InBev to explore options to restructure the bottling operations in a number of countries.
Delta and its associate Schweppes produce and sell TCCC brands under bottler’s agreements with TCCC.
In a trading update for the third quarter and nine months ending December 31, 2018, Delta says discussions amongst the parties are ongoing.
The notice to end the bottler’s agreement follows Coca-Cola’s announcement in 2016 to acquire SABMiller’s stake in Coca-Cola Beverages Africa (CCBA).
The impact of this is a scenario where the company could lose at least a third of its income and its ability to satisfy demand for its sparkling beverages line.
Meanwhile, the Company said it has entered into binding agreements to acquire the 100 percent stake currently held by Diageo Plc in United National Breweries Proprietary Limited (South Africa), (UNB).
UNB is the leading brewer of traditional beer and owns the Chibuku brand in that country. The transaction is expected to close in the first half of 2019 and is subject to regulatory approvals in Zimbabwe and South Africa.
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