Delta Corporation says the Bottlers Agreement with The Coca-Cola Company (TCCC) runs until May 2018 and engagements on the intention by Coca-Cola to terminate the agreement are now moving towards a common solution.
In October last year, The Coca-Cola Company gave notice of its intention to terminate the Bottlers’ Agreements with Delta Beverages and its associate Schweppes Holdings Africa Limited following the combination of Anheuser-Busch InBev NV/SA (AB InBev) and SABMiller Plc.
Delta and its associate Schweppes produce and sell TCCC brands under bottler’s agreements with TCCC.
Giving a trading update for the four months to July 2017, chief executive Pearson Gowero said while the engagements are finding common solution, the group is in the meantime focused on growth.
“We are positioned to take advantage of consumer trends and we will focus attention on certain lines to drive growth,” he said. Mr Gowero said the improved agricultural season and widening electronic payment platforms in settling transactions boosted volumes for Delta for the period.
Lager beer volumes were up 12 percent during the period compared to prior year. The Eagle larger grew 24 percent as consumers continue to prefer lower end brands while the core larger was 10 percent above prior year.
Mr Gowero said the growth momentum was maintained in July. In the premium segment, Castle Lite and Zambezi are strong, maintaining double digit growth.
Mr Gowero said Chibuku volumes benefited from additional capacity but volume declined due to small unit of purchases of 2-litre scud vs the 1,25-litre super.
The Sorghum beer volume was 5 percent down on prior year with Chibuku Super growing by 9 percent.
The CEO said before end of the current financial year, the group will introduce a new packaging of the scud to a returnable container which is in support of revenue growth strategy.
The soft drinks category was up 3 percent with both the sparkling beverages and Maheu registering growth.
Nonetheless the group is still facing a little competition from imports. In terms of associates, Mr Gowero said Afdis which is due to release its financials registered encouraging volumes and revenue.
He said Schweppes has not had a decent performance in the year so far, particularly during the first quarter of the year, as a result is behind on revenue and volume.
The company’s Beitbridge Juicing Plant and the Best Food Processors have not yet started to input positively to the company.
Nampak is stable but was affected only by the shortages of foreign currency. In that regard, Mr Gowero said Delta is failing to remit dividend to foreign shareholders which now amount close to $50 mln.
At the AGM audit and directors fees were approved at $400 000 and $226 000r espectively. – Wires.