Delta Beverages flags threat to Zimbabwe’s beverage sector from high sugar prices, taxes 

ZAMBIA – Delta Beverages has issued a stark warning to Zimbabwe’s Parliament, citing high local sugar prices and steep taxes as major threats to the sustainability of beverage manufacturing in the country.  

Speaking to the Parliamentary Portfolio Committee on Industry and Commerce, Delta’s Finance Director, Alex Makamure, urged policy reform to safeguard industry viability. 

Makamure highlighted the cost disparity between local and imported sugar, noting that Goldstar Sugars and Tongaat Huletts are selling sugar at US$900 and US$890 per metric ton, respectively, while imported sugar lands at US$800/mt before a 30% surtax is applied.  

He stressed that these costs, compounded by the sugar tax introduced in February 2024, are significantly increasing production expenses. 

“Currently, imported sugar is landing at $800/mt before adding the 30% surtax. With the added cost of sugar tax, the impact of the sugar cost is a key determinant to the viability of our business,” Makamure told legislators. 

The sugar tax adds an additional US$100/mt, forcing beverage companies to raise product prices by 15% to 45%, particularly affecting sugar-rich drinks like Mazoe Orange Crush.  

Although the surtax was halved to US$0.0005/g in January 2025, providing some relief, the sector continues to face weakened consumer demand. 

Makamure noted that while companies have tried to absorb the tax burden to sustain volumes, the inconsistent supply of quality sugar from local producers remains a concern.  

The Zimbabwe Sugar Association reported having over 16,000 tons of carry-over bottler-grade sugar from 2024 and forecasts more than 90,000 tons of uncommitted stock in 2025.  

However, Makamure argued that local producers have repeatedly failed to meet both the quantity and quality requirements for the beverage industry. 

As a solution, he recommended aligning Zimbabwe’s sugar tax structure with regional benchmarks and targeting only beverages with sugar content exceeding 4g/100ml.  

He also raised concern over the Zimbabwe Revenue Authority’s practice of introducing legal directives through public notices without parliamentary backing, contributing to uncertainty in the tax environment. 

In its financial report for the year ending March 31, 2025, Delta disclosed confirmed tax payments of US$254.15 million—comprising US$230.35 million in indirect taxes and US$23.8 million in income tax. Indirect taxes rose by 19% year-on-year, while income tax spiked by over 500%. 

Delta also faces an additional US$74.8 million in disputed assessments under legal challenge, which could raise its total tax liability to US$329 million.  

The company said fluctuating taxes and regulatory policies have disrupted distribution strategies, pricing, and demand.  

Despite these pressures, Delta recorded revenue of US$807.47 million for the period, a 5% increase from the previous year. 

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