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United Breweries shares climb 5% as beer supply to Telangana resumes
After the 8 January announcement, United Breweries’ shares had dropped over 4%.
The company said this is an "interim decision" taken in the "interest of consumers, workers and stakeholders".
Shares of United Breweries, the maker of Kingfisher beer, rose by 5% on 20 January after the company announced its decision to immediately resume the supply of beer to Telangana Beverages Corporation Limited (TGBCL).
In a statement to the stock exchange, United Breweries described the move as an "interim decision" made in the "interest of consumers, workers, and stakeholders." The company stated: "We have been in talks with TGBCL, and these have been constructive discussions. TGBCL has assured us that our concerns regarding pricing and outstanding payments will be addressed within a defined timeframe. Based on these assurances, we have decided to restart supplies to TGBCL for the time being."
This development follows United Breweries' earlier announcement on 8 January that it had suspended the supply of beer to TGBCL due to unresolved issues. The company had cited the lack of a basic price revision since 2019-2020, which led to significant financial losses, as well as overdue payments from TGBCL for previous beer supplies.
After the 8 January announcement, United Breweries’ shares had dropped over 4%. However, the decision to resume supply has positively impacted market sentiment, with shares rising 5% to trade at ₹2,052 by 11:18 am on 20 January. Over the past year, the company’s shares have shown an overall increase of approximately 10%.
This resumption of supply highlights a significant step forward in United Breweries’ negotiations with TGBCL. While the company awaits further resolution, the decision is expected to provide temporary relief for all parties involved, including consumers and employees.
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