Stable economy drives lager volumes up

By The NewsDay | Oct. 22, 2012 | 2 Min read

A rebounding economy and new product lines helped Delta Corporation contribute 9% to the parent group’s lager beer consumption, the company has said.

A rebounding economy and new product lines helped Delta Corporation contribute 9% to the parent group’s lager beer consumption, the company has said. By Business Reporter

In its latest trading update, SabMiller, majority shareholders in Delta said Zimbabwe, Mozambique and Zambia spurred the group’s lager volumes during the period under review. Europe, according to the world’s leading brewer with more than 200 brands, continued to drive growth despite crises in some economies

“Lager volumes in Africa grew by 6% on an organic basis, cycling strong comparatives. Robust volume growth continued in most African markets although overall growth in the second quarter was impacted by a significant excise increase in Tanzania,” said SabMiller in its latest trading update.

“A focus on premiumisation and pack innovation coupled with improved availability, helped increase volumes in our associate in Zimbabwe by 9% on an organic basis.”

Premiumisation is the key trend behind recent innovative product launches, with consumers continually seeking better quality products, services and experiences across the board. The trend is driven by economic growth, abundance of choice and changing aspirations. Zimbabwe has since the introduction of multiple currencies in 2009, continued to record positive economic growth, one of the highest in the region.

Lager volumes in Zambia grew strongly at 14% driven by improved availability and enhanced distribution in rural areas coupled with favourable economic conditions. Lager volume growth in Mozambique (10%), according to the update, was underpinned by robust growth in the mainstream brand, Manica, together with continued growth of the cassava-based brand Impala.

In Uganda lager volumes declined by 3% in the context of continuing economic weakness and cycling, particularly strong prior year comparatives. South Sudan continued to grow lager volumes by double digits despite the political and economic challenges of recent months.

“The beer market in Tanzania was negatively impacted by a 25% excise increase passed through to consumers in July 2012, which resulted in an 8% decline in our lager volumes for the half year. Our associate Castel delivered lager growth of 5% on a pro forma basis including the combined Angola business and their Madagascar acquisition. Other beverage categories contributed significantly to total volume growth, with soft drinks 8% higher and other alcoholic beverages up 12%, both on an organic basis,” further reads the report.

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In the year ended March 31 2012 the group reported earning before interest, taxation and armotisation of $5,634 million and group revenue of $31,388 million.