Why United Breweries has stop Beer supplies to this State? United Breweries Ltd. has announced the suspension of beer supplies to the Telangana Beverages Corporation Ltd (TGBCL) with immediate effect. The company cited the failure to revise the basic price of its beer since the 2019-2020 period as the main reason for this move, leading to substantial financial losses in the state. Additionally, United Breweries mentioned that TGBCL had accumulated significant unpaid dues for past beer deliveries.
In response, Telangana’s Excise Minister, Jupally Krishna Rao, rejected United Breweries’ actions as pressure tactics. He stated that the state government would not allow the company, which holds a dominant 70% market share, to leverage its position to push for a 33% price hike. Rao emphasized that since the government took office, TGBCL had paid the company ₹1,131 crore. He also highlighted that as of December 7, 2023, TGBCL still owed ₹407.34 crore to United Breweries. Payments made between December 12, 2023, and January 7, 2025, amounted to ₹1,131 crore, but as of January 8, 2025, the outstanding balance had risen to ₹658.95 crore.
In the fiscal year 2023-24, Telangana sold 547.95 lakh beer cases, with United Breweries contributing to 382.73 lakh of that total. By December 2024, TGBCL had sold 413.23 lakh cases, with United Breweries accounting for 275.22 lakh of them. The Minister also contested the company’s claim of outstanding dues amounting to ₹702 crore or ₹900 crore.
Sources indicate that United Breweries typically sells around 40 lakh cases per month in Telangana, holding an estimated 72% market share in the state. Payment to beer companies is generally made 45 days after the sale of the product by TGBCL. C. Hari Kiran, the Director of the Prohibition and Excise Department, commented that much of the pending dues stemmed from the previous government’s tenure and that beer price revisions are within the purview of a pricing committee, which is actively reviewing the issue. He also noted that United Breweries had taken drastic action by suspending supply without prior notice, which deviates from the standard practice of advance communication.
Industry representatives, such as M. Kameshwar Rao, President of the Association of Liquor and Beer Suppliers, supported United Breweries’ position, stating that the price of beer had only seen a small increase in May 2022, whereas price revisions are typically expected every two years to account for rising production costs. Rao pointed out that when the price revision was due in May 2024, the state government had only engaged with the All India Beer Association (AIBA), excluding local industry associations from discussions, which denied them insight into the situation. He also highlighted the high taxes on beer in Telangana, which added to the strain on the industry.
Finally, an official source revealed that United Breweries had previously used similar pressure tactics three times in the past.
