No Price Hike for Beer: Telangana CM

Hyderabad: Chief Minister A. Revanth Reddy has rejected the demand of beer companies for an increase in beer prices by at least Rs 10 per bottle. According to industry representatives, production costs have surged by nearly 40 per cent since the last price revision in 2019.

Though the state government had previously set up a Price Fixation Committee (PFC) to review prices, official sources said Revanth Reddy is firm on his stand against what he called “arm-twisting tactics” from beer manufacturers. He also made it clear that the government will neither extend tax benefits to the beer industry, nor increase prices.

The Brewers Association of India (BAI) had written to the Chief Minister last month, highlighting that the current price framework, which was established in 2019, no longer reflects the rising production costs.

In a letter dated November 10, BAI director general Vinod Giri stated that production costs had risen by 35-40 per cent, but the government has not yet approved a price adjustment to reflect these increases. The association argued that this had made operations in Telangana commercially unsustainable, with future investments also at risk.

In response to BAI’s concerns, the Telangana government had set up the PFC in July to review the situation. The committee had asked beer companies to submit proposals for revised prices, with BAI providing input on the industry’s challenges. However, no progress has been made since the industry consultations concluded in early August.

BAI pointed out that beer suppliers had only been allowed minor price increases in recent years — a hike between 9 and 11 per cent in 2018 and another increase in the range of 5.5 and 7.5 per cent adjustment in 2022. The association noted that over the past seven years, these increases had been far below the actual rise in production costs, which it claims have gone up by 45-50 per cent, according to Wholesale Price Index (WPI) data from the Union government.

The association further stressed that Telangana’s beer prices are 30-50 per cent lower than those in neighbouring states, making it financially unsustainable for companies to operate in the state. They proposed that the government either allow free pricing, as practised in states like Karnataka and Maharashtra, or at least adjust beer prices in line with inflation, using benchmarks like WPI to ensure price adjustments are made automatically.

However, Revanth Reddy was unyielding in his response, rejecting all proposals for price hikes. He made it clear that Congress is not a party that would bow to the demands of the alcohol industry, unlike the previous BRS government. He emphasised that the Congress government would not tolerate any threats or attempts to undermine the state’s pride.

Revanth Reddy said the state government will ensure the lowest beer prices in the region. "If any beer company thinks it can armtwist the government, it is mistaken. We will stand firm," the Chief Minister was quoted as saying.