After beer manufacturer United Breweries Limited (UBL) suspended the supply of popular beer brands, including Kingfisher, to Telangana, Chief Minister Revanth Reddy said that his government “will not succumb to pressure by the companies.” UBL had demanded an increase in beer prices by 33%, according to the Chief Minister’s Office.
UBL, which also manufactures and sells various beer brands including Kingfisher, Heineken, Amstel Bier, and London Pilsner, suspended beer supply to Telangana from January 8, citing outdated pricing policies that have not changed since 2019-2020 as well as unpaid dues, saying they had caused financial strain on the company.
On January 12, CM Revanth held a review on liquor supply and beer prices with excise officials. When officials brought to his attention that UBL had demanded an increase in beer prices by 33.1%, he said that the government would not succumb to pressure. He also instructed officials to examine beer prices in neighbouring Andhra Pradesh, Maharashtra, and other states.
Revanth asked officials to issue a notification for applications from new companies, with a one-month deadline. Companies must apply with their brand names only and the selection process should be carried out transparently by examining quality standards and supply capacity, he said. He also cautioned officials to strictly follow rules while permitting new companies to supply liquor in the state.
He said that a decision on liquor price hike will be taken based on the report of the Price Fixation Committee headed by a retired High Court judge. The committee was set up by the state government in July 2024 to review how liquor and beer prices are fixed. It had consulted beer companies too for suggestions, but its findings are yet to be made public.
UBL, now controlled by the Dutch brewing company Heineken NV, said that it has been incurring significant losses in Telangana due to the unchanged base prices for beer.
The Brewers Association of India (BAI), which represents major brewers such as UBL, AB InBev, and Carlsberg, said that the state owed about Rs 3,900 crore in unpaid dues to the alcoholic beverages sector for the period of February to August 2024.
The CM on January 12 ordered Finance Department officials to systematically clear pending dues through the Excise Department to liquor manufacturers. He also instructed officials to adopt a transparent mechanism in selecting liquor suppliers.
Excise and Prohibition officials were asked to follow a simplified trade policy for supply of new liquor brands by companies which have already been supplying alcohol to the Telangana Beverages Corporation Limited (TGBCL). TGBCL is a public sector entity and holds a monopoly over liquor distribution in the state.