Coca Cola’s volumes soar despite sugar tax
Pauline Dikuelo | Monday June 13, 2022 06:00
In the Sechaba Brewery Holdings’ annual report released this week, directors said last year began with “record-breaking deliverables” in the first quarter, followed by normalised volumes in the second and third quarter, before a dip in momentum in the last three months of the year. Total volumes for the year were up 17.4% year on year and nearly eight percent above target.
Sechaba, which holds 49.9% equity in CCBB, had previously expressed concerns that the sugar levy introduced in April last year would impact the demand for its product and deflate sales volumes.
“With the long-term effects of the COVID-19 pandemic still prevalent in the Botswana market, 2021 was a year centred on 'recovery' for all businesses,” directors stated. “However, this recovery was seriously threatened by the introduction of a sugar tax on top of the VAT and fuel price increases simultaneously implemented. “Despite these headwinds, not only to the business but also our consumers’ pockets, CCBB did excellently to reach all its volume targets and beyond.”
Directors noted that the 440ml can was a particular anchor of growth for the year, with sales rising 34.8% year on year and having “a very positive effect on the year’s profitability”. Volumes were driven by the two-litre packs which contributed 62.8% of total sales.
CCBB’s sparkling soft drink portfolio continued to be the largest category in the business, contributing to 87.4% of total volumes for the year. The category was driven by the core Coke, Fanta, and Sprite brands, with the Coke brand closing the year +14.2% above target. Directors said although the second-largest sparkling brand, Fanta, saw declines, these were offset by the resurgence of the Sparletta brand, which delivered 15.5% above target volumes.
“The CCBB trade marketing team did excellently to support the sparkling category throughout the year, constantly maintaining visibility in trade through promotions and activations,” directors said.
Sechaba’s share of profits from CCBB rose to P65.2 million in the year ended December 31, 2021, compared to P51 million in the previous corresponding period. The holding company’s chair, Tabuya Tau hailed the resilience of CCBB and Kgalagadi Breweries Limited, Sechaba’s other associate in which it holds 49.9%.
“We are grateful for the confidence that customers of our associates have shown in them and looking forward, we are emerging from the pandemic even more resilient, aligned, and stronger than before,” she said.