Date Of Article: 4/3/2002
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Chibuku raises opaque beer prices
By: Ayam Maeresa
Chibuku Products Limited (CPL), manufacturers of opaque beer, has raised the prices of its products by an average five percent to meet escalating costs of raw materials. Marketing manager George Macheka said in an interview in Blantyre yesterday CPL adjusted the prices of a one-litre packet to K23 from K21, while the newly-introduced Scud bottle, which was at K19, is now selling at K20 each. He said CPL waited for six months to adjust its prices despite the increase in the price of maize, a major component in the production process. Maize prices shot up by almost 400 percent to K24 per kilogramme from K6 per kilogramme as a result of the food shortage in the country which forced government to import about 150,000 metric tonnes from South Africa and Uganda. According to an economic report produced by the National Economic Council (Nec) for February, the price has reached K40 per kilogramme in some areas of the country. “We couldn’t adjust our prices at that time because a lot of our customers had problems with disposable income and so we tried to cushion the impact by streamlining on some of our products,” said Macheka. He, however, said Chibuku could not sell at the original prices now because it was also financing the purchase of other imported ingredients such as sorghum. “All along, the company has been absorbing the losses until now when we can’t do otherwise but follow the economic trends,” said Macheka, who described the increase as marginal compared to maize price increase. He said CPL has also been largely affected by the unfavourable economic environment which has led to increases in operational costs. The company last increased the prices in October 2000. The prices were reduced in July 2001 in response to a cut in import duties by government. Said Macheka: “Looking at market trends, only a reduction in corporate tax will lead to a reduction in the prices [of beer] because there is nowhere maize will come down to below K15.”
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