Heineken-controlled United Breweries said that it had incurred “escalating losses” after efforts for price hikes failed. (image-X/Heineken)
Heineken-controlled United Breweries, which supplies Kingfisher, one of the most popular beer brands in the country, suspended its sales last week after a disagreement over prices with the Telangana government. Telangana is India’s biggest beer-consuming state.
In India, states individually regulate prices of alcohol products. They also require signing off on liquor pricing changes every year.
Also Read | From Manu Sharma To Siddharth Sharma: Indri Whiskey Owner And Jessica Lal’s Killer
In a statement, United Breweries, the Indian subsidiary of Heineken, said that the company had incurred “escalating losses” after efforts over the past two years to increase base prices of its products in Telangana failed.
Announcing suspension of supplies in the state, the company said that its operations had become “unviable” in Telangana.
One liquor store owner in Hyderabad said that some outlets only have ten days of Kingfisher beer stock remaining while others have enough for just two days, reported NDTV.
Responding to the supply halt, state minister of Excise and Prohibition Jupally Krishna Rao said that United Breweries were asking for a 33.1 percent price hike on its beer, which would have become a “burden” on consumers.
Although the company did not reveal the financial details of its losses, United Breweries CEO Vivek Gupta in May 2024 said that it owed 7-8 billion rupees in lost revenue from Telangana.
Also Read | Madhya Pradesh’s Illicit Liquor Smuggling Meets Gujarat’s Alcohol Demand For Decades: Report
The South Indian state contributes nearly 15-20 percent of United Breweries beer sales by volume. According to Reuters, it forms a significant 10-12 percent of the company’s earnings.
The move comes amidst other companies such as Diageo, Pernod Ricard, AB InBev, and Carlsberg demanding over $466 million (collectively) in unpaid dues.
As per Brewers Association of India, beer prices companies charge around Rs 300 per case in Telangana while in Maharashtra, it costs Rs 500.
