United Breweries assured of price hike; resumes operation in Telangana

As United Breweries announced resuming the supply of beer to the Telangana Beverages Corporation Ltd. (TGBCL), the state government has assured the beer maker of a price hike decision soon.

According to a CNBC-TV18 report, the decision on a price hike is expected in the next 30 to 45 days. Meanwhile, outstanding dues are likely to be cleared in instalments in the next 12-13 months.

Shares of United Breweries rose by 5% on 20 January after the company announced its decision to immediately resume the supply of beer to TGBCL.

In a statement to the stock exchange, the maker of Kingfisher beer described the move as an "interim decision" made in the "interest of consumers, workers, and stakeholders."

The company said, "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."

In response to the same, Telangana's excise commissioner said that no dues have been pending to the beer industry since September 2024 and that they have been following a 45-day cycle for releasing the payment.

The 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.

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.