Zimbabwe: Delta Beverage praised for beer price policy

The announcement that Zimbabweans managed to spend a startling US$23 million on local beer in April highlights a number of very positive trends in the Zimbabwean economy, All Africa communicated on June, 1.

At the beginning of the year it was difficult to find local beer, although supermarkets were full of imported cans. Even with dollarisation Delta Beverages, a leading Zimbabwean beer producer, at first found it hard to compete; in many cases imported cans were cheaper than the local product.

But Delta got organised, raised capital from its international partner SABMiller, raised its productivity and priced its products aggressively. It now has 90 percent of the beer market in Zimbabwe, as Zimbabweans switch from imported cans to local bottles, purely on price although the resumed manufacture of those bottles locally by one of Delta's major suppliers helped.

The Delta example shows that offering a decent product at a lower price increases volumes so significantly that profits rise while prices fall, industry observers comment.

03 June, 2009