Starafricacorporation,
Hippo Valley and Triangle Limited are the biggest producers of sugar in the
country, which most people use for daily consumption.
However, a
report presented yesterday to the Parliamentary Portfolio Committee on Industry
and Commerce by Delta financeDirector Alex Makamure revealed that the sugar
supplied by local producers is unsuitable for beverage making.
This is based
on the quality specifications of the International Commission for Uniform
Methods of Sugar Analysis (ICUMSA), an international standards body, founded in
1897, that publishes detailed laboratory procedures for the analysis of sugar.
The body’s
methods book contains detailed instructions for analysing raw, cane, white,
beet, molasses, plantation white and speciality sugars, which are widely
adopted as the standard across the globe.
Makamure made
the presentation to justify the importation of sugar by beverage manufacturers.
"The Delta
soft drinks businesses operate under the Coca Cola Company, which defines the
quality specifications under the International Commission for Uniform Methods
of Sugar Analysis, which defines the colour grading scale for sugar purity. The
Delta Group, therefore, uses either Bottler Grade (ICUMSA grade range 35-50) or
Manufacturer Grade (ICUMSA 100 Grade),” Delta said.
“The main
suppliers of refined sugar StarAfrica (Goldstar Sugars) and Tongaat Hulett
(Hippo Valley & Triangle). Over the years, have failed to meet the quantity
and quality requirements.
“Given these
challenges, the Ministry of Industry and Commerce has agreed with the bottlers
that they be allowed to supplement their requirements from imports.”
Delta said
sugar was on the controlled list of imported products and was not on the Open
General Import Licence; hence, an import permit must be issued by the Industry
and Commerce ministry for the importation of the commodity.
“Sugar also
attracts a protective import surtax of US$100 per tonne. In addition, Statutory
Instrument 50A of 2025 (15 May 2025) imposes a further surtax of 30% on the
import cost of sugar.
“These duties
and surtaxes penalise the manufacturers even when they have no alternative, but
to access foreign supplies. Access to foreign markets requires forward planning
to avoid expensive spot purchases and failure to get the required quality from
approved foreign suppliers.”
Since the
introduction of the sugar tax charging US$0,001 per gramme of sugar contained
in beverages, Delta has been reeling financially because of the added cost.
During its
financial year ended March 31, 2025, Delta and its subsidiary, Schweppes
Zimbabwe, paid the equivalent of US$20,7 million as sugar tax.
The complaint
by Delta comes as the firm is seeking to get the best value out of its sugar
supplies while also reducing its costs significantly.
“The current
local sugar pricing at US$900/MT (metric tonnes) from Gold Star and US$890/MT
from Tongaat Hulett is not competitive. The price is well above the import
landed (cost) and impact on our price competitiveness,” Delta said.
Currently,
imported sugar is landing at US$800/MT before adding the 30% surtax. With the
added cost of the sugar tax, the impact on the sugar cost is a key determinant
of the viability of our business.
“The high cost
of sugar is in addition to the recently introduced sugar tax, which is
equivalent to another US$100/MT.”
Tongaat Hulett
Limited, the parent company of Hippo and Triangle, is a South Africa-based
agriculture and agri-processing firm.
Delta advised
legislators that historically, the group could not secure a firm commitment for
the supply of the company’s requirements from Gold Star and Tongaat Hulett for
a year.
“The industry
would experience a shortage during the off-season period (January-May) and as
such, we had to import to cover the shortfall,” Delta said.
“We have
experienced significant disruption to our operations in the past due to erratic
and indifferent performance by our local partners, particularly during the
summer peak period when the sugar mills are off-season. The suppliers have at
times failed to meet the indicated quality parameters.” Newsday
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