Global liquor companies chase Indian state dues of $400 million

United Breweries

12/06/2026 12:04

    * Industry groups say Telangana has been paying off new
debts before old
    * Says it fears risk of bad debts
    * Telangana is one of the biggest alcohol-consuming states

    By Aditya Kalra
    NEW DELHI, June 12 (Reuters) - Indian groups representing
alcohol giants Diageo  DGE.L , Pernod Ricard  PERP.PA , Heineken
 HEIN.AS  and Carlsberg  CARLb.CO , accused the southern Indian
state of Telangana of breaching accounting rules over dues it
owes them totalling nearly $400 million.
Telangana, the country's biggest beer-consuming state by volume,
like many other local governments in India, requires liquor
companies to supply only to state-run depots, which then sell to
retailers, forcing the companies to rely on state governments
for payment.
    The system has long soured relations with big drinks
companies and last year Telangana officials acknowledged they
owed money to liquor firms without giving reasons for the
delayed payments. 
    The state government has from this month been paying off new
dues early, while old debts pile up, the industry leaders said.
Contractually, early payments can be made at a slightly lower
rate, but that has to be agreed with the companies that say the
government is acting unilaterally.
    On Friday, industry bodies the Brewers Association of India,
the Confederation of Indian Alcoholic Beverage Companies and the
International Spirits and Wines Association of India, which
together represent 80% of the country's liquor, beer and wines
market, issued a joint statement raising concerns about the risk
of bad debts.
     
    RISK OF BAD DEBT?
"Old outstanding (payments) may remain unpaid turning into bad
debt over time thus creating massive financial burden and risk
for the industry," the groups said, adding not paying old dues
first was "fraught with non-compliance" with accounting
standards.
    The statement assessed the amount owing for December 2025 to
April 2026 dues at 37.25 billion rupees ($392 million).
    The Telangana government did not respond to requests for
comment from Reuters, and neither did Diageo, Pernod, Heineken's
United Breweries, Carlsberg and Anheuser-Busch InBev.
For international companies, India has the lure of being one of
the relatively few places where alcohol demand is growing, but
the many obstacles to profitability include high taxation and
separate regulations in each state as well as the current
payments row. 
Pernod is also locked in an antitrust case and fighting a $314
million tax demand from India, while Anheuser-Busch InBev is
contesting a competition law case.

(Reporting by Aditya Kalra; editing by Barbara Lewis)
((Email: aditya.kalra@tr.com; X: @adityakalra;))