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Harare - Zimbabwean retailers, including the local arm of Pick n Pay, are no longer stocking edible oils and poultry products produced in South Africa despite insisting on Tuesday that "not enough" supply lines are coming through from local producers.
The situation has led to a thriving informal sector and price distortions.
President Robert Mugabe's government wants retailers in the country to pick 50% of their stock from local producers, although the country’s manufacturing capacity base has sagged to 38% during the first half of the current year.
The Zimbabwean retailers are now set for collision with local producers, who are pushing for them to reserve 85% retail space for local products under a Buy Zimbabwe campaign.
Albert Katsande, the chief operating officer at Pick n Pay's biggest rival in Zimbabwe, OK Zimbabwe, said there are opportunities to engage regional producers to set up base in Zimbabwe.
This forms part of measures to boost the country's productive capacity, which continues to be hobbled by power outages and limited access to lines of credit for retooling and capacity enhancement.
“Opportunities are there to engage other companies in the region to manufacture in Zimbabwe,” said Katsande in an address to suppliers, retailers and other industry stakeholders on Tuesday.
He highlighted that Zimbabwe does not have capacity to reach economies of scale in some categories such as the manufacture of toothpaste and other products that require mass production.
However, he said the manufacturing industry for cooking oil and the poultry industry in Zimbabwe had almost turned the corner. This had resulted in local retailers mostly stocking with 100% local poultry and edible oil products.
“We are no longer stocking imported chicken and eggs. We are now stocking 100% locally produced cooking oil and we have no reason to stock imported cooking oil.”
However, in the other basic categories such as soaps, detergents, personal body care and confectioneries, there is still no capacity, forcing retailers to continue importing.
A representative from a local manufacturer that produces tinned beans said the local suppliers are not able to meet demand, forcing the company to import from Malawi.
The head of procurement at TM Supermarkets and Pick n Pay, Jealous Kondo, said the company is stocking 100% locally produced sugar although other sources said locally produced sugar for industrial use is of low quality. Kondo said the company’s policy on local procurement weighs against foreign sourced stock “determined by what the company gets” from suppliers.
“We are beginning to see other categories coming up but there are still some problems with other categories, where local products are sometimes slow to move,” he said.
Other retail executives said local suppliers have to match the competitiveness of other suppliers in terms of pricing, marketing support and quality. They said retailers in Zimbabwe are increasingly competing on product quality after a slowdown in consumer spending patterns.
