Wait a minute. No need to start celebrating yet. Beer and soft drinks shortages are not over yet. This is what is coming out of the horse’s mouth, Delta Beverages. A joint statement released after the Reserve Bank of Zimbabwe (RBZ) and Delta Beverages met had raised hopes that the problems were over. But, before the ink has dried on that agreement, Delta Beverages has come back bearing more bad news, for now.
In another press release, Delta Beverages acknowledges the outcome of the joint meeting but says, “It is noted that the arrangements will have lead times hence the current shortages of products particularly soft drinks will persist in the meantime. As of now, Delta Beverages has not reviewed its wholesale prices noting that traders have increased their retail prices.” Put in other words, production will remain constrained until government, through the RBZ, avails the much-needed foreign currency. Government’s bureaucratic processes need to be taken into account. We have already seen that whenever a big company like Delta sneezes, the whole country catches a cold, so government will have to meet its end of the bargain real quick before we can start seeing drinks on our shelves again.
Wholesale prices
As a consequence of the joint meeting, Delta Beverages has not reviewed its wholesale prices yet. This means that the prices default back to where they were before the announcement of the US dollar only pricing. Unfortunately, some retailers had already affected their own price adjustments in anticipation of increases by Delta Beverages. Now, by saying it has not reviewed its prices, Delta Beverages is exonerating itself from the whole mess happening on the retailers’ side. On the ground, some retailers have already started withdrawing stock from their shelves or hiking prices. No one wants to sell now for a price which will be inadequate to re-stock. So, essentially, retailers are waiting for Delta Beverages who are waiting for government in order to come up with new prices. Once government releases the forex, Delta Beverages will know what to charge, so too will the retailers.
Lessons learnt
In the past few days, we have been taught that business at the level where Delta Beverages is operating is only for shrewd tacticians. Delta Beverages may have dropped the bombshell in order to get a quick ear from government and sneak back into the forex allocation gang in record time. Or it may have been an honest plea meant to assist them to gain access to forex to pay their obligations to foreign shareholders and suppliers. While we all agree that beer is far less important that human life, we have been reminded once again who calls the shots. It is the big blue-chip companies that drive the economy. Delta Corporation employs more than 4 000 people countrywide producing more than 15 beer brands. Its well being surely keeps the country going, one way or the other. Letting such a large company fold is suicidal on the part of a government which is on a crusade to lure even more investors.
All in all, there is likely to be a new price list coming from Delta Beverages in the near future. One that has Bond notes, RTGS and US dollar prices. But one thing is certain for now. Delta has re-joined the elite league of companies enjoying lenient foreign currency allocations from the RBZ. Whether or not the forex will be enough to cover all requirements is a question only time will answer.
