Sunday, July 3, 2022

Coca- Cola Botswana sales ‘blue ticks’ sugar tax

Global messenger Application – WhatsApp users will be familiar with the App’s two blue ticks, which signal that the recipient has opened up the sender’s chat message. Some recipients may choose to read and ignore the message or respond in an undesired manner. This is what appears to have been done by consumers of non-alcoholic sweetened drinks in the country given the introduction of sugar taxation by the Botswana government last year.

The company that sells various brands of sweetened drinks which are subject to the sugar tax, Coca-Cola Beverages Botswana (CCBB) says its net sales revenue jumped nearly 23 percent in 2021 compared to the previous year. This means that consumers of sweetened drinks ‘blue ticked’ the sugar tax during the year under review.

CCBB’s parent company Sechaba Brewery Holdings noted in its annual report for 2021 published recently that despite headwinds which entails sugar tax, Value Added Tax and fuel prices increases, the company did excellently to reach all its volume targets and beyond.

The BSE quoted brewer says its subsidiary began the year with record-breaking deliverables in the first quarter. Volumes then normalized, but remained positive in the second and third quarters. Directors of Sechaba noted that a dip in momentum in the fourth quarter deliverables did not deter a full year volume result that was +17.4 percent up vs 2020 and +7.8 percent up against the target.

“With the growth in volume augmented by price taking, on the back of the sugar tax, CCBB Net Sales Revenue (NSR) closed +22.9% vs 2020”, reads part of the notes in the Sechaba Holdings annual report.

Sechaba Holdings is made up of two associate companies, Kgalagadi Breweries Limited (KBL) and Coca Cola Beverages Botswana (CCBB), holding 49.9 percent shareholding in each company, while the rest is held by Ab-InBev. In the financial performance for the full year 2021, the group achieved a profit before tax of P219 million, a 30 percent increase from P168 million in 2020, the comparative period.

Company directors said that the main driver for this performance is the results of the Associates during the period as  its income line comprises mainly of share of results of the Associate entities. “The Associates experienced improved performance relative to 2020 with total combined volumes increasing by 11% for the year 2021. The improved performance was due to the eased Covid 19 related controls and restrictions, which included the lifting of the alcohol ban”, noted Tabuya Tau – Sechaba Brewery Holdings board chairman.

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