No more Kingfisher, Heineken beer in Telangana as United Breweries suspend supply over pricing
Telangana is India's biggest beer-consuming state, with Kingfisher, including Kingfisher Strong, Kingfisher Ultra, and Kingfisher UltraMax, accounting for around 60 per cent of the total sales. Telangana accounts for around 15-20% of United Breweries¡¯ beer sales and 10%-12% of the company's earnings.
Planning to unwind after a hectic day at work with a bottle of beer? You might be out of luck if you are in Telangana, as your favourite beer is going off the shelves. United Breweries has suspended the supply of Kingfisher and Heineken beer in Telangana, citing huge financial losses the company has suffered in recent years due to the state government's refusal to revise the prices.
Business in Telangana unviable
¡°We have decided to immediately suspend supplies to Telangana Beverages Corporation Ltd. (TGBCL) due to significant and ongoing operating losses in Telangana. Despite our continuous efforts over the past two years, there has been no increase in the base prices offered for our products. This has resulted in escalating losses, making our operations in the state unviable. We have a fiduciary responsibility to all our stakeholders, and with each beer sold at a loss, it has become unsustainable for us to continue our operations,¡± United Breweries said in a statement.
Beer sales in Telangana
According to reports, Telangana is India's biggest beer-consuming state, with Kingfisher, including Kingfisher Strong, Kingfisher Ultra, and Kingfisher UltraMax, accounting for around 60 per cent of the total sales.
Telangana accounts for around 15-20% of United Breweries¡¯ beer sales and 10%-12% of the company's earnings.
Beer prices last revised in 2019
In a National Stock Exchange filing, United Breweries noted that beer prices in Telangana were last revised in 2019.
United Breweries further said that state-owned Telangana Beverages Corporation Limited (TGBCL) has significant overdue payments for the past supply of beer.
While United Breweries did not provide details on the financial losses it has suffered due to the lack of price revision in five years, in May 2024, CEO Vivek Gupta said in an earnings call that it was owed 7-8 billion rupees in lost revenue from Telangana.
United Breweries wanted 33 per cent increase
Reacting to the development, Telangana Excise Minister Jupally Krishna Rao said that United Breweries had asked for a 33.1% price hike on beer, which would "become a burden on consumers."
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