Zimbabwe’s beverage say the country’s sugar tax continues to weigh heavily on earnings, demand and value chain sustainability, despite the earlier reduction by the Treasury to dilute the impact.
Stakeholders in the industry continue negotiations with the Government for relief measures.
The sugar tax on beverages is meant to mobilise financial resources required to combat rising non-communicable diseases (NCDs) like cancer, diabetes and obesity linked to high sugar consumption in the country.
The Treasury announced last year it had raised over US$25 million between early 2024 and mid-2025 from the sugar tax for the procurement of cancer treatment equipment, including linear accelerators and CT simulators.
Introduced in February 2024, the sugar tax is levied at US$0,001 per gramme of added sugar on specified beverages, applied uniformly to both ready-to-drink and concentrated beverages.
While the Government reduced the surtax on cordials from US$0,001 per gramme to US$0,0005 per gramme with effect from January 1, 2025, industry players maintain that the levy on the rest of the affected beverages remains high.
Delta Corporation, Zimbabwe’s largest beverages manufacturer, said that although its operations delivered significant volume growth and better trading margins during the half year to September 30, 2025, these gains were narrowed by the sugar tax.
“Group revenue for the half year at US$514 million increased by 32 percent compared to the prior year, reflecting the volume growth across the Zimbabwe business units and the inclusion of Schweppes as a subsidiary.
“The revenue growth was weighed down by the price moderations in the sparkling beverages business, which partly absorbed the sugar tax to maintain volume and competitiveness,” the company said in its financials.
Delta noted that trading margins improved on the back of lower cereal and packaging material costs, favourable currency movements and higher throughput.
“However, the benefits were eroded by the under-recovery on the sugar tax,” the company said.
During the half-year period, Delta and its subsidiary, Schweppes Zimbabwe, paid an equivalent of US$15 million in sugar tax compared to US$16,5 million in the same prior period, an untenable situation compared to earnings generated in this category.
“Engagements with the government are continuing to avoid the inevitable damage to the category going forward,” Delta said.
