Last week, United Breweries halted beer sales to the southern Indian state of Telangana after the state government refused to approve a 33.1% price hike for its products. The company stated that despite efforts to address the issue over the past two years, the lack of price increases on its products had led to mounting losses, making operations in the state unsustainable.
Following the announcement, United Breweries’ stock dropped by 7%. The suspension of sales has begun to impact businesses and consumers in Telangana, which has an estimated population of 38 million and consumes approximately 500 million liters of beer annually, according to the Brewers Association of India.
In Hyderabad, the state’s capital, liquor store owners reported a growing shortage of beer. One store owner shared with Reuters that on January 13, they received a notification from their supplier that no Kingfisher beer was available. With fewer than 3,000 licensed liquor outlets in the state, and alcohol licenses being awarded through a lottery system, the shortage is being exacerbated by the rationing of beer supplies to retailers.
Industry insiders warned that if United Breweries does not resume its supply to Telangana soon, stock levels could run out within two weeks. United Breweries produces popular beer brands including Kingfisher, Heineken, Amstel, Bullet, UB Export, and London Pilsner for the Indian market. The company has yet to comment on the situation.
In addition to its dispute with United Breweries, Telangana is also dealing with antitrust allegations against Pernod Ricard, another major player in the alcohol market.
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