Delta revealed that it had been receiving erratic supplies of foreign currency from the Reserve Bank of Zimbabwe and was struggling to pay foreign suppliers who are now unable to continue providing credit or meet new orders, hence the decision to switch to the foreign currency pricing regime.
With effect from January 4, 2019, drinking fizzy drinks as well as local liquor will be a luxury for the majority of Zimbabweans as Zimbabwe’s largest beverage and alcohol maker and supplier Delta Beverages will be charging its products in the scantily available United States Dollars.
It will be a bleak and more likely a dry year for Zimbabweans who were used to pump out whatever amount in the local pseudo currency of Bond notes.
The company which had closed its soft drinks factory citing they have not been spared by forex challenges obtaining in the country. Charging in hard currency, according to the company’s management is meant to cushion itself from the biting forex crisis.
“Our business has been adversely affected by the prevailing shortages of foreign currency, resulting in the company failing to meet your orders and in the case of soft drinks, being out of stock for prolonged periods,” Delta Beverages said in a statement.
The unfavourable business climate was pinned on the austerity measures cited in the new fiscal and monetary policy framework announced by Finance and Economic Minister Mthuli Ncube last October.
“The new fiscal and monetary policy framework in place since October 2018, does not provide for easy access to foreign currency by non-exporters. The Company has only received limited foreign currency allocations from the banking channels, which have not been adequate to fund the import requirements,” said the company.
January 4 is the day retailers and wholesalers would be charged the US$.
“In order to sustain its operations, the Company advises the retail and wholesale customers that its products will be charged in hard currency with effect from Friday 4. January 2019,” said Delta.
Since dollarization, the company has invested over US$600 million for its operations.
“Our products am fairly priced in USD and have remained largely unchanged since 2013. The Company has invested in excess of USS600 million in plant and equipment, vehicles and ancillary services since 2009. There is need to protect this investment and ensure sustenance of all value chain partners. The prices of local materials and services have escalated both is USD and in RTGS (ostensibly in response to the foreign currency exchange rate.),” Delta said.
Unbeknown are exchange rates to be used by Delta as they will not be using the parallel market rates as there are no official rates at the moment between the US$ and the RTGS/Bond.
“The company does not trade on the parallel or black market and does not subscribe to any exchange rate between the USD and the RTGS Or Bond Notes as they are not currencies. There is need for wider consultation on policy interventions to build consensus and market confidence among stakeholders to stabilise the macro-economic environment,” the company said.
With Delta advising the nation of this grim development, more players like Pepsi Varun Beverages are likely to follow suit.
Meanwhile, fast food operators like Chicken Inn and Chicken Slice have started charging in US$ although cross rating against the ‘Bond’ currency.