|Delta, traders face off|
|Tuesday, 18 September 2012 00:00|
DELTA Corporation is pressing ahead with its plans to reduce the discount threshold to wholesalers of its beverage products under a raft of measures being strongly resisted by the wholesalers and retailers’ lobby group. The newly formed Beverage Wholesalers and Retailers Association of Zimbabwe plans to discuss its grievances with Delta’s senior management.
Before the latest move, wholesalers enjoyed a 5 percent discount on purchases. Under the revised agreement Delta seeks to reduce this to 2,6 percent.
“As a consideration for stocking and wholesaling the products, Delta will grant a 2,6 percent off the price of products ordered by the wholesaler(s),” said a company spokesman.
Delta corporate affairs director Mr George Mutendadzamera had not responded to e-mailed questions as promised by the time of going to print yesterday.
But commenting on the related issues earlier, he had said the arrangement was not a new phenomenon.
“It has always been the practice that our partners either wholesale or retail our products,” he said.
“This is so because as a distribution agent, any given wholesaler receives from Delta a discount on the wholesale price of our products which in turn allows that wholesaler to sell to our customers (retailers) at the wholesale (recommended) list price.”
But BWRAZ president Mr Isaac Kanjera said the members would meet Delta executives and obtain legal counsel before signing the agreement.
“In terms of the value chain analysis of the business it (Delta) is not taking all the stakeholders into account,” said Mr Kanjera.
He said that while Delta wanted to reduce the percentage discount to wholesalers it required retailers to sell at recommended prices, which reduced the operators’ margins.
The arrangement could affect all players along the value chain, as most of the wholesalers double up as retailers as well.
BWRAZ also wants to meet Delta’s senior executives to air their grievances over the proposals in the new agreement, which bars wholesalers from running bottle stores.
“The wholesaler shall not, at any time during the continuance of this agreement, operate as both wholesaler and retailer for the products,” reads part of the proposed agreement.
The fresh agreement was meant to run for the 12 months starting from March this year, but most of the wholesalers only received copies of the new proposals last month.
Wholesalers have expressed concern over the beverage manufacturer’s plans saying it smacks of interference in their activities and want the firm to concentrate on production.
Against this background wholesalers want Delta to leave distribution to independent players in order to eliminate a single dominant player’s control over the entire value chain.
Delta is the country’s only manufacturer of lager beers and also holds a significant stake in spirits manufacturer and distributor African Distillers Limited.
Earlier discussions between BWRZ and Delta operations director Mr Etherton Mpisaunga did not yield he desired results and the beverages association now wants dialogue with the firm’s chief executive, Mr Pearson Gowero.
The meeting with Mr Gowero would not take place over the last few weeks as he was abroad on business.