Zambian Breweries has engaged the Bars and Nightclub Owners Association of Zambia in the context of the current supply challenges and price volatility in the market in the run-up to the festival season and beyond.
Zambian Breweries has acknowledged that 2020 has not been a good year of business because of COVID-19 and the imposed restrictions that disrupted scheduled projects to expand brewery capacity and increase production to meet anticipated future demand.
However, now that the markets are open across the region and restrictions have eased, capital projects are on course, and the breweries are looking forward to increasing capacity to meet the growing market demand in the short term. The 2020 upgrade that was impacted by the COVID-19 pandemic will be finalized early next year and will represent a significant investment of US$18M, providing an increase of 30% of our local production.
Addressing the media and Bars and Nightclub Owners Association of Zambia at its plant in Lusaka, Zambian Breweries Country Director Jose Moran said: “Zambian Breweries is doing its best, but we need everyone’s support in controlling and addressing this situation; the problem of beer shortages and prices on the market.”
“In the eyes of everybody, it seems that Zambian Breweries is the one creating the artificial shortage of beer and increases in price, but that is not true,” he stated.
Mr Moran revealed that the brewery has maintained its production capacity, but he explained: “We have the same capacity we had one year ago, but the demand has grown organically. We are struggling to catch up, although we are currently working to maximise our efficiencies and resources trying to go beyond our normal capacity.”
“Something people need to understand very well is the whole thing around the price abuse and increases. Yes, indeed, there are people on the market that are taking advantage and we are fully aware of the situation,” said Mr Moran.
“We are not hiding it because hiding it is going to make it even worse. We are already in contact with the Zambia Competition and Consumer Protection Commission (CCPC), our official distributors and the Bars and Nightclub Owners Association of Zambia to see how we can best manage the situation quickly,” he added.
Zambian Breweries has engaged directly with distributors in the market, urging them to avoid conduct which could be illegal or unethical and to put the interests of the consumer and the sustainability of their businesses at the heart of the operations.
The Company also appreciates the cardinal role of the market regulator in enforcing the laws which are intended to protect consumer welfare.
Bars and Nightclub Owners Association of Zambia President Peter Mwale said: “The biggest challenges we have now are the shortage of beer and the distributors. Our members on the ground are not happy with what is happening in the distribution of beer by distributors. We have also reported these issues on the artificial shortage and unethical conduct being created by some of these distributors.”
“We have seen for ourselves that you are producing and operating almost at normal capacity despite the scarcity or lack of empties, but production is going on.”
“Despite the brewery maintaining its order prices for crates and cases, some traders have decided to hike prices beyond the recommended prices set by the brewery, disadvantaging consumers.”
“Now the prices of beer are very high, and even to access them is a challenge and almost every day we must get in touch to find out where we can find the commodities like Mosi.”
The Association seeks to engage government to review the COVID-19 restrictions on bars and nightclubs. Currently bars and nightclubs can only operate on Fridays, Saturdays and Sundays. This has also disrupted the distribution time and process leading to deficiencies.
Zambian Breweries Brewery Director Franz Schepping said the brewery would continue to operate through the holidays, both Christmas and New Year, to help meet demand for its beer from consumers.
“The brewing and packaging teams will continue to work 24/7, we are not stopping on Christmas and New Year,” said Mr Schepping.
He also urged consumers, retailers and distributors to return quality empty bottles to allow a smooth manufacturing process.