Hyderabad: Bharat Rashtra Samithi (BRS) senior leader T Harish Rao on Wednesday, January 8, expressed serious concerns regarding United Breweries’ recent decision to halt beer supplies to the Telangana government.
He emphasized that this move raises significant questions about the financial dealings of the state government, particularly in light of unpaid dues and pricing issues stated by the company.
BRS govt cleared bills based on seniority: Harish
Rao suggested that the suspension might reflect a broader issue of “preferential treatment” in how bills are cleared.
He said that in the previous BRS administration, payments were often processed based on seniority.
“United Breweries’ decision to halt beer sales to the Telangana government raises serious questions. UB stated that TGBCL, the Telangana government’s beverage corporation, has failed to clear outstanding payments for previous beer supplies. The suspension of beer sales by United Breweries is expected to disrupt the availability of premium brands like Kingfisher and Heineken in Telangana. Could this be a deliberate attempt to promote local brands like Boom Boom Beer and Beeryani Beer? Has this situation arisen due to “preferential treatment” in clearing bills, instead of adhering to seniority or merit? (The BRS government used to clear bills based on seniority.),” he said on X, tagging Telangana CMO, deputy chief minister Bhatti Vikramarka Mallu and Prohibition & Excise minister Jupally Krishna Rao.
Kingfisher, Heineken beer supply halt in Telangana
The maker of the Kingfisher beers, the United Breweries Group, on Wednesday, January 8, has decided to suspend the supply of its beers to the state of Telangana, the company said in a statement, over pricing disputes with the Telangana Beverages Corporation Limited (TGBCL).
The United Breweries Group produces and supplies beer brands including the Kingfisher Premium, Kingfisher Strong, Kingfisher Ultra, Kingfisher Ultra Max, Kingfisher Ultra Witbier, Amstel, Heineken, and Heineken Silver, among others.
The supply of these beers will halted in Telangana with the new decision from the UB Group. The brewing company said that the decision to suspend the supply will come into effect immediately.
According to the company, the decision came in the background of two reasons.
The TGBCL has not revised the base prices of the beers sold in Telangana by the UB Group since 2019, resulting in a huge loss for the company.
The TGBCL also has significant payment overdues with the company, over the beers sold in Telangana in the past. The situation has come to a stage where the continued supply of beers has become unviable for the UB Group.
United Breweries is India’s largest beer producer, with over 40 percent of the market share in the industry.
Brewers urge Telangana govt to approve price hike
Earlier in November 2024, The Brewers Association of India (BAI) representing major beer producers like United Breweries, AB InBev, and Carlsberg urged the Telangana government to approve price increases for alcoholic beverages to offset inflation.
In a letter to chief minister A Revanth Reddy, BAI director general Vinod Giri noted that the current prices allowed for beer suppliers are based on 2019 cost submissions despite production costs rising since then. He stressed that without an adjustment in prices operations in Telangana have become commercially unfeasible and future investments are no longer viable.
While acknowledging that the association cannot speak for individual companies, Vinod Giri proposed a 35 to 40 percent average price increase to reflect the higher production costs. He also pointed out that beer prices in Telangana are currently 30-50 percent lower than in neighbouring states which is leading to losses for suppliers.
