Bottles of Heineken beer are displayed on a shelf in a supermarket.
Credit: Reuters Photo
Hyderabad: Tipplers in Telangana will no more enjoy the prized KingFisher and Heiniken beer as United Breweries Ltd (UBL) had decided to suspend supplies to the state citing operational losses due to no increase in base prices and mounting pending dues.
“"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,” said a statement from United Breweries Ltd.
Additionally, the company said substantial overdue payments for the supplies made to TGBCL further complicated the situation. The Brewers Association of India (BAI) has made multiple representations to the government regarding the industry-wide challenges, urging price increases to offset inflation, but unfortunately, there has been no resolution to date, said UBL.
“We remain committed to supporting our employees during this challenging time and deeply appreciate their hard work. Our company contributes more than Rs 24,500 crore annually to the state's revenue. Despite the mounting financial pressures, we have ensured the uninterrupted supply of our beer, driven by our commitment to consumers and customers,” said UBL.
The beer manufacturer also urged the Telangana government to take swift action and work with them to safeguard livelihoods, restore financial sustainability, and ensure the continued availability of their products.
Responding to UBL, Telangana excise minister, Jupally Krishna Rao said that the company has demanded that state Beverage Corporation increase the beer prices by 33%, which would raise the current price of Rs 150 to Rs 250 per beer.
Talking to reporters, the minister said However, the government has rejected this demand, citing the company’s alleged monopoly behavior.
Rao mentioned that the previous government had left behind unpaid bills, with Rs 11,000 crores already paid and Rs 650 crores pending. Additionally, the Excise Department has Rs 2,500 crores in pending dues from the previous government.
Comparing beer prices across states, Rao noted that Karnataka and Andhra Pradesh have prices around Rs 180-190, while Telangana has a lower price of Rs 150. He assured that the government will not succumb to pressure and has not increased taxes by even a single paisa since coming to power.