Delta renews hostilities with beverage wholesalers

Published: 09 April 2014

Delta Corporation has renewed hostilities with beverage wholesalers amid allegations that the beverage manufacturer is demanding payment within three days despite holding security from customers.

Wholesalers said they have been reduced to "cash customers" although Delta is holding security and does not allow a second bond on the collateral.

As such, the traders claim they are being forced not to bank process from their business, a cardinal rule for businesses that want to create a track record with banks on their cash flows to get financial support.

However, Delta said it accepted all forms of approved payment systems in Zimbabwe and was not aware of customers who have failed to make payments through any of the approved channels.

But traders said in many instances, wholesalers go for days without supplies while Delta claims to be waiting for electronic payments to start reflecting.

Beverage Wholesalers and Retailers Association of Zimbabwe president Mr Isaac Kanjera said where traders are secured they should be given time to pay.

"We have property mortgaged to Delta, but our customers are being treated like cash customers," he said.

"It is worrying because they are looking in one direction only and Delta is the one that is benefiting," said Mr Kanjera.

"One cannot come and register another (second) bond on top of the security that Delta will be holding.

"Instead, they should say ‘we have mortgaged your bond we will give you eight or seven days to pay," he said.

Company secretary Mr Alex Makamure said yesterday that Delta accepts all payments forms including rapid transfer gross settlement, cash, Ecocash and electronic cards, but admitted in some instances banks fail to process payments in time.

"You would be aware that some banks have been delaying or failing to clear RTGS payments, so customers affected may opt to pay in cash," he said.

Mr Makamure said customers are affected by the tight liquidity challenges in the economy and in some cases are not meeting agreed trading terms.

"It follows therefore that credit terms may be withdrawn for those in default; this is a normal business process."

Mr Makamure pointed out that the challenges could be confined to certain customers as credit management is evaluated at an individual customer basis.

However, retailers insisted that since credit is secured, wholesalers and retailers who get supplies on credit should not be forced to pay up in three days, as they have to sell their stock first.

Affected wholesalers told The Herald Business that they no longer bank proceeds from their businesses, which is critical to obtain loans in future.

They now have to pay in cash to get deliveries in time since Delta is allegedly delaying supplies claiming that electronic transfers are taking time to reflect.

This marks yet another episode in the often uneasy relations between Delta and its customers after an earlier clash over reduction of discount.

Delta announced late in 2012 that it would reduce the discount threshold from 5 percent to 2,6 percent of the order placed by wholesalers or retailers, irking the customers as it squeezed their margins. The issue is set for arbitration soon.

Members of the Association have in the past accused Delta of taking advantage of its near monopoly in the beverages industry to hold the customers at ransom.

They have also expressed reservations over its involvement in manufacturing, supplying, distribution, wholesale and retailing saying this went against the grain of the objectives of the Zimbabwe Agenda for Sustainable Socio-economic Transformation and the indigenisation policy.

They said instead of empowering the indigenous business people, the business practices of Delta are throwing them out of business as it reduced their margins.

Mr Kanjera however said wholesalers and retailers should adopt proper stock and cash management systems to avoid challenges that could drive them out of business in an illiquid economy.
- The Herald

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