HYDERABAD (Reuters) – Telangana, India’s largest beer-consuming state, is facing a shortage of Kingfisher beer, one of the country’s most popular brands, following United Breweries’ decision to halt sales due to a pricing dispute. The company, controlled by Heineken, suspended its shipments last week citing delayed payments and the lack of approval for price hikes since 2019/20.
In India, which ranks as the world’s eighth-largest alcohol market, each state independently regulates alcohol pricing, with these products serving as a significant source of tax revenue. In Telangana, where alcohol is purchased by the government and distributed to retail shops, authorities have begun rationing supplies to curb hoarding and mitigate shortages, according to several liquor store owners.
Madhusudhan Rao, a liquor store owner in Hyderabad, told Reuters on Monday that a notification from the local depot revealed that Kingfisher stock had been exhausted. “Today we got a notification from our depot that there is no Kingfisher beer stock anymore,” he said.
United Breweries, which produces Kingfisher, stated that its decision to halt sales in Telangana was driven by ongoing financial challenges, including the inability to secure approval for price increases, which have been pending since the 2019/20 period. This move highlights the financial strains within India’s $45 billion alcohol market, where major global players such as Diageo, Pernod Ricard, AB InBev, and Carlsberg are also grappling with unpaid dues totaling approximately $466 million.
The dispute is also a reflection of broader regulatory pressures, including ongoing antitrust investigations affecting the industry.
In response to the suspension, Telangana’s government suggested that United Breweries was using the supply halt as a strategy to pressure for higher prices, with a panel currently reviewing such requests. However, local officials have not commented further on the situation.
According to Purushottam, another liquor store owner in Hyderabad, some outlets have just 10 days’ worth of Kingfisher beer left, while others are running low with only enough stock for two days. An industry source revealed that outlets and depots in the state are expected to run out of United Breweries products within two weeks.
United Breweries holds a dominant market share in Telangana, controlling approximately 70% of the state’s beer market, which sees annual sales of around 60 million 12-bottle cases. The Brewers Association of India noted that beer prices in Telangana are significantly lower than in other states. In Telangana, companies charge around 300 rupees per case, compared to approximately 500 rupees per case in Maharashtra. When state taxes and retailer margins are factored in, the final consumer price can be five to six times higher in other regions of India.
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