This state may soon face liquor shortage due to…, liquor companies demand Rs 40033779561 from govt for…

Telangana is staring at a looming liquor shortage after Heineken suspended supplies to the state this week, while other global liquor makers, including Diageo, Pernod Ricard and Carlsberg, are demanding about $466 million (Rs 40033779561) from the state government in unpaid dues.

Telangana Liquor Shortage: Telangana is staring at a looming liquor shortage after Heineken suspended supplies to the state this week, while other global liquor makers, including Diageo, Pernod Ricard and Carlsberg, are demanding about $466 million (Rs 40033779561) from the state government in unpaid dues.

Heineken’s United Breweries has said it will halt supplies to Telangana, India’s biggest beer consumer, because of delayed payments and lack of government approval for higher prices since fiscal 2019/20, which hurt its finances, Reuters reported. United Breweries is India’s biggest beer company, and Wednesday’s unprecedented move to suspend supplies to the southern state, triggered a 7% fall in its shares.

In a statement on Wednesday, Telangana’s Minister for Tourism and Culture, Jupally Krishna Rao, said United Breweries, which which has 70% of the market in the state had suspended supplies as a “tactic” to press for price increases, which tend to blunt consumer demand. The minister said Telangana owed $77 million to United Breweries, but did give reasons for the delay in payments.

Citing sources, Reuters reported that Telangana owes Carlsberg $5 million, while AB InBev is owed $17 million. Whisky and Scotch brewers are owed much more hefty amounts, with Pernod Ricard demanding $175 million, and Diageo asking for $116.40 million in unpaid dues, the report said.

In a letter to the Telangana government, the Brewers’ Association of India and International Spirits and Wines Association of India expressed concern over the delay in payments, saying that it was “creating tremendous difficulties for companies”. According to the groups, the areas worst hit were operations and efforts to sustain and plan investments, the Reuters report said, citing the October 3 letter.

The groups estimated that brewers were owed a total of $606 million at the time, it said.

Some states like Telangana require liquor makers to supply only to state-run depots, which then sell to retailers, forcing the companies to rely on state governments for payment. According to industry sources, Telangana owed total unpaid dues of about $466 million to whisky and beer companies, the report said.

India is the world’s eighth-biggest alcohol market by volume, with annual revenues pegged at $45 billion in 2024, according to Euromonitor. Alcohol is a major contributor to the revenue of states which individually regulate liquor prices.

(With inputs from Reuters)