Mutare Bottling Company (MBC) has suspended a distribution agreement with Schweppes Zimbabwe saying the deal was not favourable.
MBC, which holds the Coca-Cola franchise for the Manicaland region, signed an agreement with Schweppes in September last year to distribute a wide range of beverages manufactured by Schweppes which included its flagship cordial Mazoe Orange Crush and the Minute Maid line of juices but terminated the agreement last month.
Both companies are part of the Coca-Cola system in Zimbabwe, along with Delta Corporation.
Coca-Cola acquired Schweppes in 2001 as part of its global acquisition of Cadbury Schweppes International’s beverage brands.
“The company has discontinued a trial distribution agreement entered into with Schweppes after a review which concluded that the commercial benefits of the partnership would not justify continuing with the agreement,” MBC managing director Allen Lang said.
“The company however continues to explore new ways to manage the business in the current economic environment.”
MBC only manufactures bottled soft drinks and reliable sources said it was close to reaching an agreement for the distribution of canned soft drinks in Manicaland.
Lang has blamed the operational challenges facing the company to stiff competition posed by smuggled beverages from Mozambique.
On Tuesday, Lang said MBC was operating at 15 percent of installed capacity forcing the company to retrench 61 workers and close its Rusape deport to lower operating costs. –The Source