The Company hereby issues a business update for the third quarter ended 31 December 2022.


The domestic economy experienced subdued  growth in 2022 due to high inflation, unstable and multiple exchange rates, reduced agricultural output and the pass-through impacts of rising global inflation together with supply disruptions arising from COVID-19 and the Russia/Ukraine conflict. The country, however, benefited from increased mining activities and diaspora remittances and government infrastructure spending.

The third quarter witnessed a slowdown in inflation and exchange rate volatility in response to some policy interventions, which resulted in increased foreign currency transactions and constrained Zimbabwe dollar liquidity.

Consumer spending remains high, benefiting from the stable US Dollar pricing, improvements in wages and salaries across various sectors and a buoyant informal sector, particularly in mining.

In South Africa, the economy was affected by power supply disruptions, rising unemployment and violent crime, exchange rate volatility and increases in fuel prices.

The Zambian economy remains stable although consumer spending is constrained.

Lager Beer

The lager beer volume grew by 17% for  the  quarter and 18% for the nine months compared to the same period last year. Product supply was stable although there were intermittent gaps arising from outages in power, water supplies, mismatches in the demand and supply of brands and packs. We continued to uprate our production capabilities which are supported by the injection of glass bottles and improved asset care.

The business continues to invest behind the brands and to focus on market facing activities. The installation    of additional packaging plant is on schedule for commissioning in the first half of 2023.

Sorghum Beer
The Sorghum beer volume in Zimbabwe grew by 11% for the quarter compared to prior year and is up 12% for the nine months. The category continues to benefit from increased brand activities as we celebrate the Chibuku brand’s 60th anniversary. The Chibuku Super

Banana flavour, which was launched in June 2022, has excited the market, and will see an increased supply once packaging capacity and supply chain bottlenecks are addressed. The installation of additional production capacity at Harare brewery is in progress for commissioning during the first half of 2023. There are ongoing efforts to optimise the available PET production capacity across the regional countries and to revive the Scud pack to cover supply gaps.

Natbrew Zambia continues to recover volumes, registering a growth of 11% for nine months, which includes some regional exports. There are opportunities to grow the returnable packs and flavoured offerings.

The volume at United National Breweries  South  Africa was flat for the quarter but grew by 21% for the nine months, reflecting the disruptions to operations arising from power cuts and reduced market service   by resellers and distributors in response to fuel price escalations.

There is an encouraging uptake of Chibuku Super which is being seeded into the market ahead of the planned investment in local production capacity in the coming financial year.

Sparkling Beverages
The Sparkling  Beverages  volume  grew  by  5%  for  the quarter and is up 14% for the nine months. The supply of PET packs remains constrained and will be addressed by the investment in additional capacity which is expected in the current quarter.  The supply   of returnable glass packs was affected by the delayed receipt of glass bottles and some disruptions to production operations arising from power and water outages.

The business continues to recover market shares despite the currency related pricing distortions.

Wines and Spirits
African Distillers Limited (Afdis) reported a volume growth of 10% for the quarter and 11% for the nine months.  The  supply  of  ciders  was  constrained  by    a regional shortage of glass bottles. The business commissioned a new PET line for packaging of spirits and commenced local fermentation of ciders.

Associate Entities
The volume at Schweppes Holdings Africa was flat for the nine months, having been affected by the shortages of juicing fruit earlier in the year. The business performance continues to be impacted by the currency related impediments in the formal retail outlets which is the business’s major trade channel. The supply of Minute Maid brands was affected by a prolonged plant breakdown.

Nampak Zimbabwe continues to benefit from the volume recoveries in the key beverages and other consumer sectors. There are some disruptions to production arising from power cuts.

Group revenue grew by  44%  for  the  quarter  and  53% for the nine months in inflation adjusted terms compared to growth of 407% and 419% for the quarter and nine months respectively in historical cost terms. This reflects the volume growth and the replacement cost-based pricing.

The Zimbabwe businesses recorded a significant increase in the proportion of foreign currency sales during the quarter to beyond 70%. There was a corresponding increase in the purchases settled in foreign currency, as the economy dollarised.

The operating environment in Zimbabwe, although stable, remains challenging, as the country goes to the general elections scheduled for later in the year. There are uncertainties posed by the COVID-19 pandemic, the rapid policy changes, and the polarised political environment.

The country has opportunities to benefit from the rich mineral resources and firming commodity prices. The Group remains focused on exploiting the opportunities arising from activities that generate aggregate demand such as the infrastructure development projects, mining activities and diaspora remittances.

The financial outturn in  F23  could  be  affected  by  the foreign currency tax assessments arising from differences in interpretation of legislation on the currency of payment of certain taxes.

The capital investment projects are progressing according to plan and expected to contribute to business performance in the coming financial period.