Delta Beverages of Zimbabwe announced on Monday that prices for its beers would go up by 25% as it tries to stem escalating prices of local materials and services.
Delta which is 40% owned by AB InBev and 14% by Old Mutual Zimbabwe, said that the price increase was effective from Monday. However, it added that it had not made a decision on new pricing for its soft drinks and other products.
Annual inflation in Zimbabwe hit a 10-year high of 31% in November following price rise of basic goods.
Last week, Delta said that it would no longer accept bond notes with effect from 4th January, but would instead charge wholesale and retail customers in U.S. dollars only.
The company said at the time that its business has been negatively impacted by shortages of foreign currency, which in turn had adversely affected its ability to pay suppliers and pay dividends to its foreign shareholders.
“….all our foreign suppliers are unable to continue providing credit or meet new orders as some of them have not been paid for extended periods,” Delta said.
By the end of September 2018, Delta owed US$41 million to its foreign suppliers and US$53 million to AB InBev shareholders in unrepatriated dividends.
But after a government push-back on its plan to start charging customers in U.S. dollars exclusively, the company abandoned the plan on Thursday.
The government said Delta cannot rush to choose the currency they wish the country should adopt but instead should be patient as government works on fiscal consolidation.
“They should not rush ahead to choose the currency they think the whole country should adopt. They should just be patient, let us work together. That is really our message,” said Finance and Economic Development Minister Professor Mthuli Ncube.
Zimbabwe is facing a foreign currency crisis, with money owed to foreign suppliers and creditors nearing US$1bn.