Here’s why Kingfisher and Heineken beers may soon be unavailable in Telangana

How did the contention erupt?

In a regulatory filing to the Bombay Stock Exchange and the National Stock Exchange of India dated January 8, UBL disclosed its determination to suspend its brew proviso to Telangana Beverages Corporation Limited (TGBCL), which controls intoxicant income successful the state.

The institution stated that its determination stems from the information that “TGBCL has not revised the basal terms of the Company’s brew since 2019-20, resulting successful immense losses successful the State and important overdues remaining unpaid by TGBCL for the past proviso of brew by the Company”.

UBL added, “The lack of terms revisions, coupled with rising costs, has led to important fiscal strain connected the company. Despite our continuous efforts, determination has been nary summation successful basal prices, resulting successful escalating losses. With each brew sold astatine a loss, continuing our operations successful the State has go unsustainable.”

The Telangana authorities owes Rs 3,600 crore to assorted beverage companies (including much than Rs 658 crore to UBL), of which astir Rs 2,400 crore is pending from the past government’s term. UBL said the Brewers Association of India (BAI) made aggregate representations to the authorities regarding the industry-wide challenges, urging terms increases to offset inflation, but determination had been nary resolution. UBL besides said it contributed much than Rs 24,500 crore annually to the state’s revenue.

Why bash UBL and intoxicant income substance for Telangana?

UBL has a marketplace stock of astir 70 per cent successful the brew conception and its exit would make a void for the TGBCL. According to authorities figures, of the full income of 5.47 crore cases of brew successful Telangana successful 2023-24, UBL accounted for 3.82 crore cases. In 2024-25, UBL’s income accounted for 2.75 crore cases of 4.13 crore cases.

According to authoritative data, determination are 9 distilleries and six brew factories successful Telangana, including 1 belonging to UBL. Overall, arsenic galore arsenic 51 liquor and brew companies are selling 1,031 varieties of liquor and brew successful the authorities done 2,620 liquor shops and 1,117 bars and pubs. Every month, 45 lakh to 55 lakh cases of brew are sold, making Telangana 1 of the largest beer-consuming states.

Compared to this, lone 30 to 35 lakh cases of liquor were sold, making Telangana 1 of the states wherever brew is sold much than liquor. The Excise Department’s publication to the authorities exchequer annually is astir Rs 36,000 crore to 40,000 crore successful revenue.

How has the authorities responded?

Excise curate Jupally Krishna Rao said that the authorities authorities would not output to the “monopolistic unit tactics” of UBL and that brew prices would beryllium hiked lone arsenic per recommendations of a terms revision committee. “The institution wanted a 33% terms increase. This would person burdened brew consumers. We person appointed a committee with a retired precocious tribunal justice to scrutinise the terms hike request,” helium said, adding the erstwhile Bharat Rashtra Samith (BRS) authorities had not hiked brew prices for 5 years.

He added that brew prices successful Telangana were overmuch little than successful neighbouring states specified arsenic Andhra Pradesh, Karnataka, Tamil Nadu, and Maharashtra. He accused UBL of taking vantage of its ascendant marketplace share, claiming that the institution is alert of the terms revision committee and yet decided to cease brew supply.

TGBCL officials said determination are capable stocks of brew for astir a week and they are utilizing each disposable means to summation the accumulation if the request arises. A akin shortage of UBL’s brew was witnessed successful May 2024 and with accrued production, the authorities withstood the unit from the company, the officials added.

While a 33% hike is not acceptable to the government, it whitethorn let a tenable hike crossed brands arsenic per the terms revision committee. The terms hike whitethorn beryllium announced aft Chief Minister Revanth Reddy returns from his Singapore and Davos circuit aft January 22, sources said.

What astir the outstanding payments to companies?

Overdue payments for the supplies made to TGBCL further complicate the situation, UBL said. According to the Excise Minister, the TGBCL presently owes Rs 658.95 crore to UBL and of this, Rs 407.34 crore has been outstanding since the erstwhile BRS government’s tenure. Since the Congress authorities took bureau successful 2023, it has cleared bills worthy Rs 1,130.99 crore to date, helium said.

The curate explained that the authorities has established a 45-day outgo rhythm and the institution has acknowledged receipt of payments successful its communications. He said the dues would beryllium cleared arsenic per the government’s finances.

Former curate and BRS person T Harish Rao said UBL’s determination raised superior questions and would disrupt the availability of premium brands, asking successful a station connected X if it was “a deliberate effort to beforehand section brands” and giving “preferential treatment” successful clearing bills.

How are retail dealers viewing the situation?

Dealers accidental Kingfisher and Heineken beers would beryllium disposable for lone 2 weeks if the authorities and the UBL bash not get astatine a communal point. The TGBCL is presently rationing brew proviso to retailers based connected their mean income successful the past 3 months to debar immoderate panic purchases.

Once the proviso wholly halts, consumers whitethorn commencement opting for different options, but accumulation cannot abruptly beryllium accrued arsenic it takes a minimum of 20 days for brew to ferment betwixt its accumulation and supply. Dealers are demanding the authorities trim import work truthful that manufacturers tin divert their supplies to Telangana to conscionable the demand.