Effects of beverage smuggling on business performance in the supply chain industry: a case study of cold chain Zambia ltd.

Abstract

The aim of the study was to establish strategies that can counter smuggling of beverages and improve business performance for The Cold Chain Zambia ltd. Smuggling poses a threat to the business as it destabilizes the legal industry of supply chain, restrains innovation and investments as well as posing a threat of company closures. This has also caused loss of consumer confidence in buying beverages from Cold Chain Zambia ltd as the products are perceived to be expensive as compared to similar smuggled beverages. The objectives of the study were to determine the extent of the effects of beverage smuggling on the Cold Chain Zambia business performance, to identify strategies which will counter smuggling and to establish strategies that can be used to counter beverage smuggling and improve Cold Chain business performance. The research design that was used was mixed methods took the form of exploratory sequential mixed method design. The target population was 80 employees from Cold Chain Zambia ltd which included both general staff and management staff. There seems to be no correlation between business performance and strategies to counter beverage smuggling. In this case, H3: There is a significant correlation between the business performance and the perception of strategies to counter beverage smuggling in cold chain supply and was refused. Results are shown above in the Table 25. It is found that there is a negative and significant between beverage smuggling and strategies to counter beverage smuggling on business turnover (F = 14.339; p<0.001). It was concluded that the causes of smuggling included smugglers attempt to evade tax, smugglers endeavor to make quick money by smuggling cheap commodities on the market, high duty, high tax ratios and customs, availability of market for smuggled goods, high demand on the market for that particular brand. It was recommended that that smuggling can be reduced by ensuring the goods are sold at competitive prices to reduce benefit of smuggling, continue with quality control, educate the public on smuggling and how to report and identify smuggling, stiffen law on smuggling in Zambia and review the clearing procedure at all points of entry to fasten the process. Key Words: Beverage, Business Performance, Smuggling, and Strategies.