United Breweries Limited (UB) has halted beer supplies in Telangana, citing a steep rise in raw material costs and delays in payments from the state government. The company clarified that production costs account for only 16% of the beer price, while nearly 70% of the price is attributed to government taxes.
UB representatives met Telangana Excise Commissioner on Wednesday and officially handed over a letter notifying the suspension of supplies. The company stated that despite multiple requests to revise beer prices, no action was taken by the government.
The company highlighted that Telangana Beverages Corporation, which typically clears payments every 45 days, has failed to do so for the past four months. This prolonged delay has led to unsustainable losses, forcing the company to halt beer distribution in the state.
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Kingfisher Beer Shortage Ahead of Sankranti
The suspension of beer supply is expected to impact consumers, particularly the youth, who prefer Kingfisher beer. While older consumers lean towards whiskey or brandy, Kingfisher remains a popular choice among younger consumers. Telangana is one of the largest markets for the brand, and the shortage comes at a critical time, with the Sankranti festival just around the corner.
Government Response to Price Hike Demand
In response, Telangana Minister Jupally Krishna Rao stated that a committee, led by a retired High Court judge, has been formed to examine liquor price revisions. The government will make a decision based on the committee’s recommendations, he said.
United Breweries has expressed concerns over financial losses, stating that beer prices have not been revised since the 2019-20 fiscal year. The company added that continuing operations under such conditions was no longer viable.
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