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Beer prices increase, Zambia
Beer prices increase, Zambia

Beer prices increase, Zambia

FMCG SUPPLIER NEWS

LusakaTimes.com - Mar 31st 2014, 09:16

Zambian Breweries (ZB) Plc has increased prices of clear beer and other alcoholic beverages with effect from last week.  

Up up goes beer prices

ZB announced increases ranging from 3.6 per cent to 19 per cent in recommended retail prices on clear beer and other alcoholic beverages on its Non-Returnable Bottle (NRB) packs and the sorghum based Eagle Lager.

According to a statement issued by corporate affairs director Luke Njovu, the increases were a combined result of inflation and the 50 per cent increase in excise duty on clear beer from 40 per cent to 60 per cent that the Government implemented as part of the 2014 National Budget.

ZB has until now absorbed the excise duty increase on its non-returnable packs in order to mitigate smuggling that would have resulted from having higher beer prices relative to regional peers.

Mr Njovu said the company has however noted that the increased excise duty has been an added direct cost to the NRB product types and has detrimentally affected company profitability.

ZB managing director, Anele Malumo, said, “In January, we decided to hold prices on our non-returnable packs in order to forestall the smuggling effect that would have resulted from the price increase.

“However, the business impact of that measure has meant that it is no longer viable. We therefore have to pass on this consumer tax that we collect on behalf of Government and also make adjustments occasioned by inflation.”

Employing over 1,000 staff, Zambian Breweries Plc. is the largest beverage company in the country and is a major contributor to economic development and Gross Domestic Product (GDP) growth through tax remittances and employment creation in its value chain.

Since March 31, 2008, the company has made a total capital investment of $382 million in its operations.

Following its recent US$98 million investment in building a new brewery in Ndola, the company was investing a further US$32.6 million in a Maltings plant in the Lusaka South Economic Multi-facility Zone (MFEZ) as part of its local sourcing barley programme in support of Zambia’s agricultural development.

With the exercise-induced increase in prices on its RGBs, ZB has since January 2014 witnessed a decrease in monthly beer sales volumes from prior levels due to consumer price elasticity.

Consequently, the company anticipates that its total tax remittances to Government would decrease in tandem compared to what it would have paid had the excise rate remained unchanged.From LusakaTimes.com 

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