Reuters logo
Botswana booze tax hits Sechaba Brewery's sales
November 18, 2009 / 1:36 PM / in 8 years

Botswana booze tax hits Sechaba Brewery's sales

* Govt imposed a 30 pct alcohol tax

* Trading conditions seen tough for next 6 months

JOHANNESBURG, Nov 18 (Reuters) - Botswana’s Sechaba Brewery Holdings SECH.BT posted a steep slide in first-half sales on Wednesday, blaming a 30 percent alcohol tax imposed a year ago as part of a government social order campaign.

Sechaba, the largest brewer in the world’s biggest diamond producing country, described the 27 percent revenue decline as one of its worst financial performances. Operating profit fell by 29 percent in the six months to September.

The company also pointed the finger at a severe recession in the landlocked southern African nation of 1.8 million people, where diamond sales account for nearly 40 percent of output.

“The sales volume of clear beer and sorghum beer declined by 35 percent and 14 percent respectively. In addition to the levy, the sales performance was also affected by recessionary economic conditions and unusually cold weather,” the company said.

President Ian Khama, a UK-trained army officer and son of Botswana’s first president, introduced the alcohol tax a year ago as part of a campaign to tackle an HIV/AIDS infection rate of nearly 25 percent, one of the world’s highest.

To reduce alcohol-related high-risk sex, the government also shortened opening hours for bars.

In its results statement, Sechaba contested whether the legislation had led to an overall cut in alcohol consumption, saying it had seen “large-scale migration” to stronger and cheaper drinks.

The trading outlook for the next six months was tough, with proposed regulations on traditional beer expected to have a further impact on sales, the company said. (Reporting by Ed Cropley; Editing by David Holmes)

Our Standards:The Thomson Reuters Trust Principles.
0 : 0
  • narrow-browser-and-phone
  • medium-browser-and-portrait-tablet
  • landscape-tablet
  • medium-wide-browser
  • wide-browser-and-larger
  • medium-browser-and-landscape-tablet
  • medium-wide-browser-and-larger
  • above-phone
  • portrait-tablet-and-above
  • above-portrait-tablet
  • landscape-tablet-and-above
  • landscape-tablet-and-medium-wide-browser
  • portrait-tablet-and-below
  • landscape-tablet-and-below