beer-lovers-having-a-hard-day-in-telangana

The beer lovers in Telangana, India’s biggest beer-consuming state, are a disappointed lot these days.

They are reeling under the impact of a shortage in supplies of the most sought-after brand—Kingfisher.

 

This is because the United Breweries, which brews the popular beer, has suspended its sales in the state following a dispute with the government over prices.

 

The company has cited delayed payments and a lack of government approval for increasing prices since 2019 for suspending the sales. As a result, the government has begun to ration supplies of Kingfisher lager.

 

“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,” the United Breweries, an Indian subsidiary of Heineken, said in a statement.

 

It now seems that the suspension of sales has begun to bite for businesses, and beer drinkers in the state. As per the data from the Brewers Association of India, Telangana buys approximately 500 million litres of beer per annum.

 

At present, the outlets and depots in Telangana have stock of United Breweries products for around two weeks, the industry sources said.

 

United Breweries, the country's biggest beer company, accounts for 70% of the state's beer market, where 60 million 12-bottle cases are sold each year.

 

The Brewers Association of India said that the beer prices companies charge in Telangana are around 300 rupees per case, whereas in Maharashtra they get around 500 rupees a case.

 

It said that states taxes and retailer margins on top of these lead to a consumer price which is five to six times higher in most Indian states.

 

Telangana stands at the forefront of India’s alcohol consumption. With an average per capita expenditure of Rs1,623 on alcoholic beverages in 2022-23—a staggering rise from Rs 745 in 2014-15—the state outpaces others like Andhra Pradesh and Punjab. It has also become a critical market for alcohol consumption and its high contribution to revenue through excise duties.

 

In fiscal 2022-23, Telangana earned approximately Rs 34,145 crore from liquor sales, a figure expected to reach Rs 45,000 crore this year. This dependence highlights how integral alcohol is to the state’s economy. The government’s delay in paying suppliers has put the market and its stakeholders in a precarious position.

 

The dues owed by Telangana, estimated at ₹4000 crore, have strained the finances of giants like Diageo, Pernod Ricard, and Carlsberg.