Afdis optimistic as crackdown on smuggling intensifies

Listed wine and spirits manufacturer, African Distillers Limited (Afdis), is optimistic that the ongoing crackdown on illicit and smuggled alcohol will curb unfair competition from the informal market.

Afdis, a unit of Delta Corporation, has previously acknowledged the significant impact of illicit products, often non-compliant with regulations, and the rise of irregular imports from neighbouring countries on its sales volumes and overall operations.

The Government has intensified the crackdown on smuggled goods to enhance the competitiveness of local industries.

Border control agencies have been instructed to implement stricter measures to address the issue.

The Zimbabwe Revenue Authority (ZIMRA) has urged travellers and cross-border traders to strictly adhere to customs regulations to avoid facing penalties from law enforcement agencies.

ZIMRA emphasised that travellers must present valid proof of their customs declarations at designated roadblocks.

Failure to declare goods, whether intentional or unintentional, can result in severe consequences, including substantial fines and the confiscation of goods.

“It is hoped that the current blitz against illicit and smuggled alcohol will curtail unfair competition,” said Delta Corporation company secretary Ms Faith Musinga in the third quarter trading update to December 2024.

The rapid escalation of illicit practices has inflicted considerable harm on legitimate businesses, leading to job losses and diminished tax revenues.

ZIMRA commissioner of customs and excise, Mr Batsirai Chadzingwa, emphasised the critical need to curb smuggling to foster a viable economy.

“If you examine the clothing and shoe industries, you’ll observe their decline due to the rampant influx of smuggled goods. This issue demands immediate attention across all sectors,” he said.

Afdis indicated its commitment to implementing measures to defend its market share, enhance sales volumes, and sustain profitable growth.

In terms of performance during the reviewed period, Afdis achieved a 14 percent volume growth compared to the previous year for the quarter and a 12 percent growth year-to-date.

The Ready-to-Drink (RTD) and Wine segments, which recorded 12 percent and 47 percent growth respectively, benefited from improved product supply and a decline in informal imports.

Zimbabwe shares borders with several countries, including South Africa and Mozambique. Some of these borders are porous, making it easier for goods to be smuggled into the country.

Last week, Finance, Economic Development and Investment Promotion Minister Pro Mthuli Ncube acknowledged the difficulties and said the ongoing crackdown on smuggling was partly aimed at addressing the challenges.

He said as part of efforts to bolster the viability of the formal retail sector, the Government had initiated a door-to-door crackdown to confiscate contraband goods entering the country and being sold within the informal retail industry.

“The issue of retailers who are struggling . . . that’s the reason why we have launched the blitz on smuggling — one of the things the retailers have told us about is that smuggling is hurting their businesses,” said Minister Ncube.

“Manufacturers are also feeling that this is hurting their businesses. So, we have had this blitz on smuggling to make sure that we slow down this illicit behaviour.

“We are very happy to look into key areas or issues that are impacting the sector negatively and I will engage them to make sure we can unlock those challenges.”

The operation is also targeting wholesalers, supermarkets and tech shops, with smuggled goods including a variety of food stuffs, clothing, drugs, beverages, fertilisers, cement,-herald

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