Beer Booms in Zimbabwe While Delta’s South African Subsidiary Struggles with Labour Unrest

From Joburg Strikes to Zim’s Gold-Fueled Beer Boom: Delta’s Rollercoaster Quarter

Labour unrest hits South Africa, but Zimbabwe raises a toast to Delta’s success

While workers in South Africa were downing tools, Zimbabweans were raising their glasses and for Delta Corporation, that meant a tale of two markets playing out across borders.

Delta Corporation, Zimbabwe’s biggest beverages company and a key player in southern Africa’s alcohol and soft drink markets, has found itself caught between divergent economic realities. On one side: labour disruptions and falling volumes in South Africa. On the other: booming beer sales driven by tobacco cash, gold mining, and diaspora dollars at home in Zimbabwe.

South Africa: Unions vs. United National Breweries

In South Africa, Delta’s subsidiary, United National Breweries, saw an 8% drop in volumes in the three months ending June 2025. The culprit? Disruptions from labour unions and activist pressure groups that threw operations off course.

Though the company says the issues have since been resolved, the timing couldn’t have been worse. South Africa’s cost of living crisis, coupled with high unemployment, has made labour relations across sectors increasingly tense — and the beer industry hasn’t been spared.

Public sentiment on platforms like X (formerly Twitter) was split, with some South Africans calling for better labour conditions in the alcohol sector, while others joked that the “strike hit harder than the hangover.”

Zimbabwe: Lager Sales Soar Thanks to Gold, Tobacco, and Diaspora Dollars

Back home in Zimbabwe, the picture couldn’t be more different. Delta reported a 19% year-on-year surge in lager beer sales, an almost unthinkable growth rate in an economy plagued by currency issues and rising poverty.

So what’s fueling the cheer?

According to Delta’s company secretary, Faith Musinga, a few factors came together:

• A record-breaking tobacco marketing season

• A spike in artisanal gold mining

• Stable pricing thanks to improved exchange rate policies

• A steady flow of diaspora remittances, especially from South Africa and the UK

This surge in consumer spending has given retailers and local businesses some much-needed breathing room, even as 55% of formally employed Zimbabweans still earn less than $100 a month, according to Zimstats.

Soft Drinks Sour as Sugar Tax Bites

Not everything was sweet, though. Delta’s soft drink business continued to lose fizz. Competition from Zimbabwe’s local Pepsi bottler has been intense, and to make matters worse, a new sugar tax has driven up prices.

Delta paid $4.5 million in sugar tax during the quarter, calling the surcharge “unsustainable” for the category. Consumers, meanwhile, have turned to cheaper imports from neighbouring countries where no such tax exists. There are also increasing reports of smuggling, yet another sign of how fragile Zimbabwe’s formal market channels remain.

US Dollars Drive the Bottom Line

Despite the soft drink slump and operational chaos in South Africa, Delta’s bottom line tells a story of resilience. Revenue rose 25% over the quarter, largely on the back of strong performance in Zimbabwe’s alcoholic beverages segment.

Remarkably, about 85% of Delta’s sales volumes were in US dollars, a reflection of how deeply dollarisation has reshaped Zimbabwe’s consumer economy.

Economic analysts at IH Securities have predicted a stronger consumer spending outlook going into 2025, with household expenditure expected to rebound by 6.6%. But the gains are fragile. Delta and others in the retail sector still face rising input costs and an unpredictable policy environment.

What It Means: A Balancing Act Across Borders

Delta’s latest earnings highlight the wild contrasts that companies navigating southern Africa must deal with, from strikes and formal sector decay in South Africa to informal market booms and diaspora-fueled growth in Zimbabwe.

It’s a strange space where selling beer can be easier than selling soda, and where gold and tobacco drive more volume than any digital marketing campaign ever could.

For now, Delta will raise a glass to Zimbabwe’s gold dust economy, while keeping a wary eye on its labour-vexed South African operations.

{Source: IOL}

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