Kingfisher, Heineken Beer To Disappear From Telangana, UBL Halts Supplies Over Losses

Last Updated:January 09, 2025, 12:49 IST

United Breweries counts Telangana as one of its key operating states, contributing roughly 15-20% of its beer sales by volume.

Heineken-owned United Breweries on Wednesday stopped supplying beer to Telangana, following the state’s refusal to allow price rises, which the company said had resulted in huge losses.

As a result, Kingfisher and Heineken beer will no longer be available in Telangana. The company attributed this move to severe operating losses, describing it as a critical step to maintain financial sustainability amidst the growing challenges faced by the brewing industry in the state.

In a media statement issued on Wednesday, United Breweries said it has decided to suspend supply of its beer to Telangana Beverages Corporation Ltd with immediate effect.

United Breweries, maker of India’s Kingfisher brand, is the country’s biggest beer company and the state of Telangana is India’s biggest beer consumer.

The decision has been taken due to the non-revision of the basic price of the company’s beer from 2019-20 by Telangana Beverages Corporation Ltd (TGBCL), resulting in huge losses in the state, United Breweries said in a regulatory filing.

Moreover, significant overdue remained unpaid by TGBCL for the past supply of beer by the company, it added without disclosing the details.

“As a result, the continued supply of our beer to TGBCL has been rendered unviable,” UBL said.

Last May, United Breweries CEO Vivek Gupta said in an earnings call that it was owed 7-8 billion rupees in lost revenue from the south state, news agency Reuters reported.

In response to the supply halt, Telangana’s minister of Excise and Prohibition, Jupally Krishna Rao, said at a press conference on Wednesday that United Breweries had asked for a 33.1% price hike on its beer, which would “become a burden on consumers.”

The minister said the state has formed an independent committee to review the price hike request. Based on its report, the government will decide on the size of the increase.

“(The) Price hike will be done accordingly, but not as much as the company is demanding,” Rao said.

United Breweries counts Telangana as one of its key operating states, contributing roughly 15-20% of its beer sales by volume. The state forms 10%-12% of the company’s earnings, said Karan Taurani, an analyst at Elara Securities.

Telangana has 18 state-run liquor depots that supply to dealers and shops, which in turn, sell to consumers.

(With agency inputs)