HomeNewsMutare City Council proposes leasing out loss-making bars

Mutare City Council proposes leasing out loss-making bars

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MUTARE City Council has proposed to lease out its loss-making bars operating under Pungwe Breweries, on the grounds the unit had become a perennial loss maker and a major drain on its coffers.
Report by Staff Reporter

Town clerk Obert Muzawazi, who also doubles as Pungwe Breweries board chairperson, told a full council meeting last week that any further delays in leasing out the beer outlets could plunge Pungwe Breweries into liquidation.

“From Pungwe Breweries there is concern that we are failing to break even after we got a bank loan to finance activities at the brewery. We are failing to recover that money and our fear is that there will be a liquidation order at Pungwe,” Muzawazi said.

Councillor Morgan Chipara said: “We have to sit down as council and seriously consider what we are benefiting from this project. Our finances are in shambles and we cannot keep on being drained by Pungwe Breweries for no gain.” Pungwe Breweries, a wholly- owned council outfit, has been in a loss-making position for more than 10 years amid claims of mismanagement and corruption.

Efforts to resuscitate it through direct cash injections have failed to revive its fortunes. Recently, council invited tenders for a private partnership, but the offer attracted no takers. A number of local authority-run breweries countrywide have gone down under similar circumstances.

The Harare City Council’s brewery and retailing business, Rufaro Marketing (RM), was also facing a crisis, with most of its outlets and brewery now not functioning.

The RM board had initially wanted to lease out most of its outlets that had been haemorrhaging due to poor business.

However, the board later backtracked, despite the fact that the company was wresting with a severe working capital crisis that had led to the failure to refurbish its dilapidated breweries and properties across Harare.

Other local authorities-run businesses that have faced similar problems include the Kadoma Liquor Marketing, Simba Breweries and Dandaro Marketing in Kwekwe, Go-Beer Breweries in Gweru and Ingwebu Breweries in Bulawayo.

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