In a significant development, United Breweries, the makers of Kingfisher and Heineken beers, has suspended beer supplies to Telangana, citing mounting losses and overdue payments from the Telangana Beverages Corporation Limited (TGBCL).

The company attributed its decision to the state government’s failure to revise the base prices for its beer since 2019-20, despite increasing prices of raw materials.

In compliance with Regulation 30 of the SEBI Listing Regulations, it has informed to suspend the supply of its beer to Telangana Beverages Corporation Limited (TGBCL) with immediate effect.

United Breweries, which commands nearly 70% of Telangana’s beer market, has been incurring unsustainable losses with every sale. “The continued supply of beer under these conditions is unviable," the company stated, adding that substantial dues from TGBCL further exacerbated the issue.

United Breweries manufactures the most popular beer brands in Telangana, including Kingfisher Light, Kingfisher Strong, Kingfisher Ultra and Heineken.

Meanwhile Excise and Prohibition Minister Jupally Krishna Rao revealed that United Breweries had requested a 33% hike in base prices, which would raise the cost of Kingfisher and Heineken beers significantly.

Prices of various Kingfisher beers that are now Rs 150, Rs 160, Rs 210, Rs 220 and that of Heineken which is Rs 230 will go up to Rs 210, Rs 220, Rs 270, Rs 280 and Rs 310 respectively if the company’s demand is agreed upon, the Minister said, pointing out to a burden on alcohol consumers.

While acknowledging the company’s challenges, the minister assured that a retired judge-led committee is examining the price hike request to balance consumer affordability and the company’s viability.

On the matter of unpaid dues, Minister Jupally clarified that the government owed Rs 658 crores, out of which Rs 407 crores were pending from the previous regime. Over the past year, the Congress government had paid Rs 1,130 crores to United Breweries.