Telangana, India’s largest beer-consuming state, has begun rationing supplies of Kingfisher, one of the country’s most popular beer brands, after United Breweries (UB), controlled by Heineken, suspended sales last week. The halt in supplies stems from a pricing dispute with the state government, which regulates alcohol prices and serves as a major source of tax revenue.
In Telangana, alcohol is purchased by the state government and distributed to retailers. Officials are now rationing Kingfisher beer to prevent hoarding and address shortages, according to three local retailers. “Today we got a notification from our depot that there is no Kingfisher beer stock anymore,” said Madhusudhan Rao, a liquor shop owner in Hyderabad, Telangana’s capital.
UB, the brewer behind Kingfisher, cited delayed payments and a lack of government approval for price increases since 2019-2020 as reasons for halting sales. The dispute highlights wider challenges facing India, with concerns growing in the world’s largest alcohol market, worth $45 billion, where major players including Diageo, Pernod Ricard, Anheuser-Busch InBev and Carlsberg are owed a combined $466 million and face regulatory hurdles such as antitrust investigations.
Telangana officials have accused UB of using the suspension as a “tactic” to pressure the government into approving price hikes. A state panel is currently reviewing the company’s request for higher prices. However, officials did not respond to requests for comment on Monday.
Retailers in Hyderabad report dwindling stocks, with some outlets having only 10 days of Kingfisher beer left, while others have as little as two days’ worth. An industry source familiar with the matter said depots and outlets in Telangana will likely run out of UB products within two weeks. UB dominates Telangana’s beer market, accounting for 70% of sales in a state where 60 million 12-bottle cases are sold annually.
Highlighting the pricing disparity, the Indian Brewers Association said Telangana charges around Rs 300 (Rs 3.50) per bottle for UB beer, which is equivalent to Rs 500 (Rs 3.50) per bottle in Maharashtra. After deducting state taxes and retailers’ margins, consumers in most Indian states pay five to six times the base price.
The suspension of Kingfisher sales underscores the growing tensions between alcohol producers and state governments in India, where alcohol pricing remains a contentious issue. As Telangana grapples with shortages, the dispute raises questions about the sustainability of current pricing models in one of the world’s largest alcohol markets.
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