Michael Gwarisa
Zimbabwe’s sugar tax, introduced in 2024 to help finance cancer drugs, equipment and other health interventions, is increasingly becoming a major financial burden for beverage giant Delta Corporation, which says it and its associate Schweppes Zimbabwe are absorbing millions of dollars in costs to keep soft drinks affordable.
The levy, introduced by government in January 2024 on sugar-sweetened beverages, was designed to discourage excessive sugar consumption while raising revenue to support the fight against non-communicable diseases such as cancer, diabetes and heart disease.
Since its introduction, Delta has emerged as one of the biggest contributors to the tax.
In its latest audited financial results for the year ended March 31, 2026, Delta revealed that the “full year sugar tax equivalent for Delta Beverages and Schweppes Zimbabwe estimated at approximately US$30 million.”
The company said the ongoing levy continues to place pressure on its non-alcoholic beverages business.
“The sugar content surtax continued to suppress the Non-Alcoholic Beverages category, driving import substitution and consumer migration to unregulated alternatives,” Delta said in its financial statement.
The company added that it had absorbed “a significant portion of the levy to sustain price competitiveness and protect volumes.”
The latest figures mark a steady rise in Delta’s contribution towards the sugar tax since the policy was introduced.
In 2025, Delta and Schweppes Zimbabwe reportedly paid about US$20.7 million in sugar tax, while in 2024 Delta disclosed it had paid nearly US$31 million in sugar-related taxes as part of broader fiscal obligations.
Although the levy has generated significant revenue for health financing, Delta says it is also reshaping the soft drinks market, with consumers increasingly turning to cheaper imports and informal products.
“The soft drinks sector continued to face pressure from cheaper imports and emerging alternative product offerings,” the company said.
Zimbabwe introduced the sugar tax as part of efforts to curb rising cases of non-communicable diseases, which health experts say are placing growing pressure on the country’s healthcare system.
Government has indicated that proceeds from the levy are earmarked for the procurement of cancer drugs, treatment equipment and other critical health technologies.
Public health experts have long argued that taxing sugary beverages can help reduce consumption of high-sugar products while generating funding for healthcare. The World Health Organization has previously recommended fiscal measures such as sugar taxes to combat obesity and diet-related diseases.
However, industry players argue that excessively high taxes may negatively affect formal manufacturers, particularly in economies already facing inflationary pressures and competition from smuggled or unregulated products.
Despite the pressure, Delta’s beverage business continued to grow during the 2026 financial year.
The company reported that sparkling beverages recorded volume growth of 14 percent, while total soft drinks volume, including Schweppes Holdings Africa, reached 3.1 million hectolitres, representing 16 percent growth over the previous year.
Delta’s overall revenue increased by 35 percent to US$1.09 billion during the reporting period.
Even as the company navigates the growing tax burden, it says engagements with government are continuing to review the sugar tax framework and strike what it called “a more equitable balance between producer value share and fiscal contribution.”
