Afdis Rides Tobacco Windfall, Anti‑Smuggling Blitz...

Afdis Rides Tobacco Windfall, Anti‑Smuggling Blitz to 51% Turnover Surge

ZimNow Business Desk

A bumper tobacco season and intensified action against illicit booze have helped lift African Distillers Limited to a 51% year‑on‑year revenue increase in the first quarter ending 30 June 2025.

The company recorded US$19 million in turnover, with total volumes up 40%, supported by robust consumer demand, improved product availability, and enforcement against smuggled alcohol. Afdis specifically credited increased consumer spending linked to a record tobacco season and strong summer harvest as pivotal to its performance.

Zimbabwe’s 2025 tobacco marketing season reached 323 million kilograms by the end of June, generating over US$1 billion, representing a significant increase of 47% compared to the same period in 2024.

Tobacco is a big forex earner and major income driver at the household level. Spending sprees linked to the marketing season show a direct lift from tobacco earnings into spending on fast-moving consumer goods.

Afdis’s Ready-to-Drink segment grew 45%, helped by its new 660 ml Night Sky can; spirits volumes climbed 36%, led by brown spirits; and wines rose 25%, particularly in the affordable segment.

“The business also benefited from ongoing interventions by authorities that include the blitz against smuggled products and the banning of illicit ethanol-based cheap spirits,” Afdis noted in its trading update released Thursday.

ZIMRA introduced the Customs and Excise (Designated Deemed Smuggled Goods) Regulations, 2025. These regulations mean that any business found with goods, including alcohol, without proof of duty payment will be considered to have smuggled those goods and face penalties.

ZIMRA and police conducted outlet raids—including major bottle‑store chains in Harare, Bulawayo, and at border posts—seizing over 80,000 liters of illegal alcohol during the December–January festive period. One December operation alone impounded 15,000 liters of untaxed whisky and cane spirits in the capital.

Afdis said it will focus on boosting margins through brand optimization, pack innovations, and cost controls, while leveraging stable rural incomes and the steady ZIG exchange rate. Yet, liquidity constraints, high borrowing costs, and power shortages remain headwinds.