Competition hots up in beverages sector

Competition hots up in beverages sector
Published: 17 May 2018
COMPETITION in Zimbabwe's beverages sector is set to intensify this year after the opening of Varun Beverages' Pepsi bottling plant in Harare.

IH Securities said the beverages spaces, which is dominated by the Zimbabwe Stock Exchange listed Delta Corporation Limited, had also seen heightened smuggling by unauthorised dealers, which added to increasing competition.

Delta Corporation operates in the same sector, which has been affected by a sharp fall in disposable incomes in Zimbabwe.

Firm closures have resulted in diminished buying power, and a falling demand, with some consumers shifting to cheaper imports.

A liquidity crunch has also been rocking Zimbabwe, making it difficult for consumers to spend on luxuries.

In an analysis of the industry last week, IH Securities said as competition will increase, the industry will continue to be affected by foreign currency shortages.

"We foresee intensified competition …with the Pepsi bottling plant now operational and arbitrage traders continuing to smuggle in grey imports," IH said in the report.

"We believe Delta has the economies of scale and distribution to maintain significant but lower market share; naturally forex will continue to be an issue for both Delta and its competitor Pepsi," the report added.

- Business Live
Tags: Pepsi,


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