Indian state rations Kingfisher beer after Heineken turns off taps in price row

United Breweries

13/01/2025 11:38

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      Some state depots already running out of Kingfisher 
    

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      Heineken halts supplies to Telangana in payments row
    

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      Global alcohol companies demand $466 million in dues
    

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      Alcohol industry faces tough times in Indian market
    

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      Telangana is India's biggest beer consuming state
    

  
    By Rishika Sadam and Aditya Kalra
       HYDERABAD, Jan 13 (Reuters) - India's biggest
beer-consuming state is rationing supplies of Kingfisher, one of
the country's most popular brands, after Heineken-controlled
 HEIN.AS  United Breweries  UBBW.NS  last week suspended its
sales in a dispute over prices.
    States in India, the world's eighth-biggest alcohol market
by volume, individually regulate pricing of alcohol products,
which are major contributors to their tax revenue.
    Alcohol is bought by the state government and then supplied
to shops in Telangana, where officials are rationing supplies to
deter hoarding and tackle shortages, three retailers said.
    "Today we got a notification from our depot that there is no
Kingfisher beer stock anymore," Madhusudhan Rao, a liquor store
owner in Hyderabad city, told Reuters on Monday.
    United Breweries, which brews the popular Kingfisher brand,
last week cited delayed payments and a lack of government
approval for higher prices since 2019/20, which had damaged its
finances, for halting sales to Telangana. 
    The move is the latest sign of stress in India's $45 billion
alcohol market, with companies including Diageo  DGE.L , Pernod
Ricard, AB InBev  ABI.BR  and Carlsberg  CARLb.CO  together
demanding some $466 million in unpaid dues.
    They are also battling regulatory challenges including
antitrust investigations.
    Telangana state said last week that United Breweries had
suspended supplies as a "tactic" to press for price increases
and a panel was deciding on such requests.
    Officials in Telangana, where some depots are running out of
beer, did not respond to a request for comment on Monday.
    Another liquor store owner in Hyderabad, Purushottam, said
some outlets had 10 days of Kingfisher beer stock remaining,
while others only enough for two days. 
    Outlets and depots in Telangana will only have stock of
United Breweries products for around two weeks, an industry
source with direct knowledge of the matter said. 
    United Breweries, the country's biggest beer company,
accounts for 70% of the state's beer market, where 60 million
12-bottle cases are sold each year.
    The Brewers Association of India said that the beer prices
companies charge in Telangana are around 300 rupees per case,
whereas in Maharashtra they get around 500 rupees a case.
    It said that states taxes and retailer margins on top of
these lead to a consumer price which is five to six times higher
in most Indian states.

 (Writing by Indranil Sarkar; Editing by Alexander Smith)
 ((Indranil.Sarkar@thomsonreuters.com; Mobile:  +91
7022132226;))