United Breweries suspends beer supply to Telangana Beverages Corporation

Hyderabad:United Breweries Ltd on Wednesday said it has decided to suspend the supply of its beer to Telangana Beverages Corporation Ltd with immediate effect.

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 Ltd (UBL) said in a regulatory filing.

The company also said that a significant amount remained unpaid by TGBCL for the past supply of beer by the company.

Responding to UB’s statement, excise minister Jupally Krishna Rao said the government will not succumb to pressure tactics employed by the UB Group. He said it cannot be allowed to use its near monopoly of 70 per cent market share to seek price increase by 33 per cent and said it was paid `1,131 crores after the government came to power.

Addressing media persons, he said, “A committee headed by a retired High Court judge is looking at the price revision issue. There are 14 lakh cases in stock with the TGBCL. The dues to the company are less in Telangana. The price of beer is less in the state. In Karnataka, its price is `190, AP `180 and Maharashtra `200. We will ensure that the prices remain less in the state. Taxes on liquor have remained the same after we came to power.”

Speaking about the amount due to UB, the minister said TGBCL owes `407.34 crore as on December 7, 2023. TGBCL paid `1,131 crores between December 12, 2023 and January 7, 2025. As on January 8, 2025, TGBCL had to pay `658.95 crore.

In Telangana, 547.95 beer lakh cases were sold in 2023-24. Of this, UB sales accounted for 382.73 lakh cases. By December 2024, TGBCL had sold 413.23 lakh beer cases and of this, UB accounted for 275.22 lakh cases.

He said the company had wrongly pegged the dues at `702 crores and also `900 crores.

The company, according to sources, sells around 40 lakh cases on average per month in the state. Industry sources peg the share of United Breweries in the state beer market at around 72 per cent. Typically, the payment to companies is made 45 days after the sale of the liquor by TGBCL.

Reacting to this development, C. Hari Kiran, the director of prohibition and excise department, said, “Majority of the pendency was from the earlier government. Revision of beer prices is under the purview of the pricing committee. The issue is under consideration. The company sent a letter today itself and resorted to this measure instead of informing in advance as per practice normally.”

Explaining the situation faced by the beer industry, M. Kameshwar Rao, the president of Association of Liquor and Beer Suppliers, said, “What the company has said is 100 per cent right. There was a paltry increase in the price of beers in May 2022. Rates have to be revised once every two years factoring in the cost escalation in raw material, packing and other heads. When it was due in May 2024, the state government negotiated only with the All India Beer Association (AIBA) ignoring the local association. This denied them the opportunity to know the actual situation.”

The revision in prices of liquor met the expectation of the industry but that did not happen in the case of beers. Taxes on beers are high in Telangana, he said.

An official source said the company had resorted to such browbeating tactics three times earlier.