United Breweries rethinks: resumes beer deliveries in India
Heineken company returns to distribute the Kingfisher "with immediate effect" to Telangana Beverages Corporation
United Breweries, known for its Kingfisher beer brand, is taking back deliveries of beer to Telangana Beverages Corporation Ltd (TGBCL) "with immediate effect". The same company reporting to Heineken in a press release confirming the decision that "follows the communication of 8 January 2025" when the brewery stopped supplying beer to South India following a refusal by state authorities to authorise price increases.
"We had talks with Telangana Beverages Corporation -the official note says-, and they were constructive discussions. TGBCL has assured us that it will address our outstanding pricing and payment issues in a timely manner. Until we have more information and basic guarantees, we have decided to resume our deliveries to TGBCL for the time being. This is a provisional decision in the interest of consumers, workers and interested parties. We will continue to engage with TGBCL during this period".
On the other hand, the sales interruption, which began on 8 January, had a ripple effect and led to drastic fluctuations in the shares of United Breweries listed on the Mumbai Stock Exchange: the stock now stands with a +5,6% sign that the news of the return to supplies was welcomed by the market. In this instance, alcohol was purchased by the state government and then supplied to shops in Telangana, where officials tried to ration products to meet shortages. Local news reports have highlighted how the city of Hyderabad would be left without beer if the ongoing problems between state government and industry had not been resolved.
Telangana, as we recall, is the first Indian state in beer consumption, where UBL currently holds 70% of the market share. However, the regulatory environment would have put a strain on the alcohol sector, with companies such as Diageo, Pernod Ricard, AB InBev and Carlsberg already claiming some $466 million in unpaid claims. India, the world’s eighth largest market for alcohol by volume, has been identified as a rather complicated growth market, given that its states still regulate alcoholic products individually, These articles contribute to the tax revenue of the central state.
EFA News - European Food Agency