By Rishika Sadam and Aditya Kalra
HYDERABAD (Reuters) – India’s biggest beer-consuming state is rationing supplies of Kingfisher, one of the country’s most popular brands, after Heineken-controlled United Breweries 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, Pernod Ricard, AB InBev and Carlsberg 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)
