Kingfisher-maker United Breweries Ltd on Wednesday announced that it has decided to suspend the supply of beer to Telangana Beverages Corporation Ltd (TGBCL), with immediate effect. The company said that it took this decision because TGBCL has not revised the basic price of its beer since 2019-2020, resulting in huge losses for the company. In a regulatory filing, United Breweries also said that there are significant overdues that remain unpaid by TGBCL for the past supply of beer by the company. “As a result, the continued supply of our beer to TGBCL has been rendered unviable,” it said.
Later in a statement, a company spokesperson said, “We have decided to immediately suspend supplies to Telangana Beverages Corporation Ltd. (TGBCL) due to significant and ongoing operating losses in Telangana. Despite our continuous efforts over the past two years, there has been no increase in the base prices offered for our products. This has resulted in escalating losses, making our operations in the State unviable.”
Also ReadIT sector Q3 results preview: Seasonal furloughs to weigh on growth, margin expansion expected, say analysts
United Breweries had forayed into brewing with 5 breweries in South India. It had launched Kingfisher Premium in 1978 and introduced Kingfisher canned beer in 1981. Later in 1991, it launched Kingfisher Strong. In 2015, the company introduced Kingfisher Ultra Max, and Kingfisher Buzz in 2016, and Kingfisher Storm beer in 2017.
The company spokesperson further added, “We have a fiduciary responsibility to all our stakeholders, and with each beer sold at a loss, it has become unsustainable for us to continue our operations. Additionally, the substantial overdue payments for the supplies made to TGBCL further complicate the situation.”
The statement further added that the Brewers Association of India (BAI) has made multiple representations to the Government regarding the industry-wide challenges, urging price increases to offset inflation, but unfortunately, there has been no resolution to date.
Telangana is a big state for UBL. This will halt sales of popular beer brands such as Heineken and Kingfisher in one of the country’s top liquor-selling states. “Our company contributes more than Rs 4,500 crore annually to the State’s revenue. Despite the mounting financial pressures, we have ensured the uninterrupted supply of our beer, driven by our commitment to consumers and customers.
» Read More
