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Govt shoots down Delta US$ prices

GOVERNMENT yesterday shot down Delta Corporation’s decision to price its products in United States dollars, in a clear indication that authorities are opposed to re-dollarisation of the economy.


There was no activity at the Coca-Cola Graniteside depot in Harare yesterday a day after Delta Corporation announced it would soon start selling its products in United States dollars, a decision which government has shot down ahead of today’s planned meeting between the two parties
Delta, the country’s largest beverages manufacturer, announced a new pricing system pegged in United States dollars on Wednesday, in a strategic move to keep itself afloat in the face of foreign currency shortages.

Industry minister Mangaliso Ndlovu, who described the move as illegal, said he was looking forward to discuss the issues bedevilling the company today with a view of finding a lasting solution.

“Look, I cannot pre-empt what we are going to discuss in the meeting. That will defeat the whole purpose of our meeting, but our position is that their proposal, promise or threat cannot work. We just want to discuss that issue and also look into the challenges they are facing,”he said.

Delta requires between $60 million to $100 million in forex per annum, but has not been able to access because of the ongoing shortages of foreign currency.

In the run-up to the festive period, the company announced that it had shut down its soft drink manufacturing plant due to shortages of imported raw materials.

The beverages manufacturer owes $41 million to foreign suppliers and dividends worth $30 million to Anheuser-Busch InBev, the world’s largest brewer, which holds a 40% stake in Delta.

Company secretary Alex Makamure yesterday confirmed their scheduled meeting with government today.

“Yes, we received a communication from government and we are meeting them tomorrow (today). If government gives us a direction, that is what we will do,” Makamure said.

Delta, one of the biggest counters on the local bourse, has invested in excess of US$600 million in plant and equipment, vehicles and ancillary services since 2009.

Confederation of Zimbabwe Industries (CZI) president Sifelani Jabangwe said government needs to manage its foreign earnings properly given that the country is performing well in export earnings.

“They (Delta) don’t want to sell in USD, but they need forex. If they are given forex, they will not continue operating. If they don’t allow them to trade in forex, they must be given foreign currency by the central bank,” Jabangwe said.

“The intervention that is required from government now is that they should be given forex. If they are not given forex they will close.”

source: newsday

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