Jan 20 (Reuters) – Heineken’s Indian subsidiary, United Breweries, has announced it will resume beer supplies to the southern state of Telangana, ending a suspension that had been in place since early January. The suspension was due to disputes over pricing and unpaid dues owed by the state government.
United Breweries stated on Monday that the decision to restart supplies was a temporary measure, taken “in the interest of consumers, workers, and stakeholders.” The company emphasized that it had reached a “constructive” agreement with the Telangana government, which assured it would address the pricing and outstanding dues in a timely manner.
Following the announcement, United Breweries’ shares saw a notable increase, rising by as much as 6.3% before settling at 2,017.65 rupees, a 3.4% gain by 11:40 a.m. IST. However, shares are still down approximately 3% from their value before the suspension on January 8.
The Telangana state government did not immediately respond to requests for comment.
Telangana is the largest beer-consuming state in India, and United Breweries holds a dominant 70% market share there. The resumption of beer supplies represents a positive development for the company amid broader regulatory challenges facing the alcohol industry in India. Other global alcohol giants, including Diageo, Pernod Ricard, AB InBev, and Carlsberg, are currently pursuing claims for unpaid dues amounting to approximately $466 million and are grappling with various regulatory hurdles, including antitrust investigations.
United Breweries initially halted its beer supplies to Telangana due to delayed payments from the state government and a lack of approval for price increases dating back to 2019/2020. These issues had put a strain on the company’s financial situation. In India, alcohol pricing is regulated by individual states, which also control the purchase and distribution of alcoholic beverages. This framework is crucial as alcohol sales represent a significant source of tax revenue for state governments.
In Telangana, local officials had previously implemented measures to ration alcohol supplies in response to shortages and to curb hoarding, further complicating the situation for breweries operating in the region.
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