Dairibord Zimbabwe, a dairy and beverage company listed on the Zimbabwe Stock Exchange (ZSE), is currently embroiled in a financial dispute with its local distributor, Masters, over unpaid inventory supplied under a US$40,000 credit facility.
Reports indicate that Masters initially approached Dairibord in March, seeking to establish a distribution partnership using its fleet of three-wheeled cycles. The agreement involved Masters using 10 Dairibord-branded tricycles exclusively to distribute the company’s products. Dairibord, in turn, contracted a third party to handle the tricycle branding.
On May 13, 2024, Masters requested a US$20,000 “revolving credit facility” from Dairibord, offering 15 tricycles valued at US$60,000 as collateral. Masters proposed that the loan would be repaid within 72 hours of each drawdown, with the understanding that any missed payment would result in the facility’s suspension. Dairibord agreed to these terms.
On June 7, 2024, Masters sought to increase the credit limit to US$40,000, explaining that the initial limit was too low to facilitate smooth operations. Dairibord approved this request, allowing Masters to maintain a minimum three-day inventory cover and boost sales. Masters also asked to extend the repayment period from three days to five working days.
However, after some time under this arrangement, Masters fell behind on payments. By late August, Dairibord intervened to negotiate a payment plan. On September 21, Dairibord informed Masters that their account had been blocked for further invoicing due to the outstanding balance. Subsequently, on October 8, Dairibord issued a letter demanding US$34,698 in unpaid dues.
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In response, Masters acknowledged the debt but, on October 21, 2024, presented Dairibord with two invoices totaling US$69,333. These invoices claimed advertising costs, with Masters alleging that Dairibord’s branding on the tricycles provided valuable exposure worth US$1,000 per month for each vehicle. Masters argued that Dairibord had benefited from the advertising value of these branded tricycles.
Dairibord dismissed these claims as unfounded, asserting that no such agreement on advertising charges existed. Additionally, Masters demanded US$5,000 for what it described as the “hire” of five tricycles displayed at a government event. Dairibord contends that the exhibition of these tricycles was a mutual arrangement, facilitated through a formal letter of request dated May 21, 2024, and did not include any agreement for payment.
Masters has also requested the release of the 10 registration books for the tricycles. However, Dairibord maintains that it is entitled to retain these documents as collateral for the credit facility. The two companies had previously signed a Special Notarial General Covering Bond (SNGCB), in which Masters pledged the tricycles as security for all outstanding amounts owed to Dairibord, including interest. Under the SNGCB, Dairibord asserts it has the legal right to retain the registration books until the US$34,698 debt is settled.
Dairibord stated, “Despite our efforts to resolve this issue through established communication channels, it’s apparent that these claims are merely an attempt to avoid payment of the outstanding US$34,698 owed to Dairibord.” The company added that it issued a final demand for payment on October 25, 2024, which has gone unanswered. Dairibord is now pursuing legal action to recover the outstanding balance.
