Weak demand and low disposable incomes have hurt beverage manufacturer African Distillers (Afdis), an official has said.
By Kudzai Kuwaza
In an exclusive interview with businessdigest on Wednesday, Afdis MD Cecil Gombera described the environment his company was operating in as “tough”.
“Like all the other alcoholic beverage manufacturers, we are all faced with demand that is really soft at the moment,” Gombera said. “Spirits are more affected than our ciders and wines. We are still registering some growth in wines and ciders, but spirits are really affected by what is happening in the economy at the moment. There is a tendency to drink down when times are hard.”
Gombera said there has also been a slowdown in demand for their products in the rural markets because of the drought crisis with most of the consumers’ income being channelled towards acquisition of grain and food at the expense of their beverages.
He said management was looking at ways to stimulate demand in the market and reducing overheads that do not affect the welfare of staff.
“At the moment, we are looking at costs that do not affect people but in the long run you do not know what will happen but currently we are looking at other overheads,” Gombera said. “At the moment, we are looking at how to stimulate demand and how we play with our pricing strategies to try and get a mix that will allow for our products to be affordable to our consumers.”
Gombera said among the strategies to stimulate demand and stay afloat, the beverage manufacturer is looking into new product developments and targeting some of the company’s products for the lower end of the market.
He said exports had slowed down due to the strengthening of the US dollar against currencies in the region. As a result, Gombera said, this has made their products expensive in the markets they export to. Afdis currently exports its products to Malawi.
Gombera said they had held meetings with Lands minister Douglas Mombeshora over its Springvale Estate which was compulsorily acquired by government in August last year.
“We have had two meetings with the minister and I think they went on very well and we remain positive that we will get a favourable outcome,” Gombera revealed “We presented our case. It (Springvale) is land we need for the production of our grapes which we then use for the manufacturing of local wines. Our presentation was well received and we are just awaiting a response from him at the moment.”