Heineken's United Breweries decides to resume beer supply to Telangana

This is an interim decision taken weeks after halting the supply over pricing and non-payment of dues by the Telangana govt

Heineken's Indian unit United Breweries will resume beer supplies to India's Telangana state, the company said on Monday, weeks after it halted supply over pricing and non-payment of dues by the state government. 

"We have decided to restart our supplies... for the time being. This is an interim decision in the interest of consumers, workers and stakeholders," United Breweries said in an exchange filing. 

The company's shares jumped as much as 6.3 per cent following the news and were up 3.4 per cent at Rs 2,017.65 at 11:40 a.m. IST. 

However, shares are still down about 3 per cent since the supply suspension decision on Jan 8. 

 

The 'Kingfisher' beer manufacturer said the interim decision was made following "constructive" talks with the government, which assured it would address the pricing and dues in a "time bound manner." 

The Telangana government did not immediately respond to a Reuters request for comment. 

Telangana is India's top beer-consuming state, where United Breweries has 70 per cent of the market share. 

The decision to resume supplies marks a reprieve in an otherwise stressed regulatory environment where global alcohol companies such as Diageo, Pernod Ricard, AB InBev and Carlsberg are demanding about $466 million in unpaid dues. 

They are also battling regulatory challenges including antitrust investigations. 

United Breweries, in its Jan 8 decision, cited delayed payments and a lack of government approval for higher prices since 2019/20, which hurt its finances, for halting sales to Telangana. 

States in India, the world's eighth-biggest alcohol market by volume, individually regulate the 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 had rationed supplies

to deter hoarding and tackle shortages. 

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