African Distillers Limited says the crackdown on smuggled and counterfeit alcoholic products has restored fair competition and supported a rebound in the company’s performance.
According to Afdis, stepped-up border controls, large-scale raids, product seizures and tougher penalties on illegal traders have significantly reduced the presence of untaxed and substandard imports.
Last year, the Government launched an intense, multi-agency crackdown on the illicit, counterfeit and unregistered alcohol industry, aimed at curbing health risks and illegal trade. The operation, led by the Zimbabwe Republic Police (ZRP), resulted in significant arrests of manufacturers and distributors, particularly in Harare.
The illegal products undercut compliant manufacturers, Afdis said in its third quarter trading update to December 31, 2025.
Trade in counterfeit products created competition for registered operators, eroding formal sector revenues and exposing consumers to serious health risks.
For Afdis, the blitz against illicit traders has redirected consumers back to verified, locally manufactured brands, particularly in categories such as whiskies and spirits where counterfeiting was widespread.
This has helped restore pricing power and market share for legitimate producers, while strengthening tax collection and improving consumption safety.
Afdis cautioned that the intervention came after considerable damage had already been inflicted on the formal retail and manufacturing ecosystem.
Prolonged exposure to illicit trade led to the closure or contraction of many formal retailers, job losses and a weakened tax base.
AFDIS called for a more proactive policy approach, urging authorities to implement early-warning systems, predictive risk assessments and preventive controls at entry points to protect legitimate industries before losses escalate.
Interventions by authorities have since reduced the impact of illegal trade and positively impacted performance in the alcoholic beverages industry.
“AFDIS delivered a robust performance as volume grew by 64 percent for the quarter and 51 percent for the nine months compared to the same period in the prior year. The outturn was driven by strong consumer demand during the festive season.
“This strong performance was driven by sustained demand across all categories, supported by the improved consumer spending and the clampdown on informal imports and illicit products,” said Afdis.
In the period under review, Afdis delivered a strong third-quarter performance. Volumes surged 64 percent year-on-year, while revenue grew 62 percent to US$30 million, driven by festive-season demand and the positive impact of anti-illicit trade enforcement.
For the nine months to December 31, 2025, volumes increased 51 percent and revenue rose 57 percent to US$71 million, laying a solid foundation for the financial year ending 31 March 2026.
Growth was attributed to enhanced consumer spending supported by several key drivers, including strong earnings from the mining sector, which generated about US$4.6 billion in 2025 on the back of record gold prices and robust domestic output.
Category performance was led by a 92 percent surge in ready-to-drink, buoyed by demand for value-oriented cider packs during the festive period.
Wine volumes grew by 49 percent on the back of accessible pricing, while spirits advanced 30 percent, driven by brown own-brand offerings aligned with traditional tastes and emerging premiumisation trends.
Improved product availability across independent trade channels increased revenue gains through a favourable mix and disciplined pricing.
The company remains confident about prospects due to continued momentum from mining, construction, agriculture, remittances and sustained enforcement against illicit trade.
With nine-month revenue already at US$71 million compared with about US$452 million in the same prior year, and third-quarter growth exceeding 60 percent, Afidis estimates full-year revenue could reach US$92–95 million if fourth-quarter momentum moderates to 45–55 percent growth.
This would represent year-on-year growth of 54–59 percent, higher than the 15 percent achieved in the previous financial year.
According to Afdis, the combination of macroeconomic stabilisation, effective illicit trade controls, resilient demand drivers and targeted investment creates a constructive environment for continued expansion.
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The company’s performance highlights both the gains from a level playing field and the need to complement monetary discipline with measures that restore affordable credit to enable formal businesses to invest and grow.-herald
