Liquor Companies Seek Repayment of Rs 3,100 Cr Dues

Hyderabad: The liquor industry on Monday urged the Telangana government to clear its dues amounting to Rs 3,100 crore, which are causing a severe liquidity crunch and working capital challenges. It also urged the state government to allow a price increase for supplier companies to cope with the sharp rise in production costs.

Industry associations and companies have written to Chief Minister A. Revanth Reddy and excise minister Jupalli Krishna Rao urging the Telangana Beverages Corporation Limited (TGBCL) to clear the dues as the industry’s ability to consistently maintain adequate supplies over the past year had been affected.

Expressing deep concern over the delay in payments, Confederation of Indian Alcoholic Beverage Companies (CIABC) director-general Anant S. Iyer said that despite repeated representations and assurances, the issue remained unresolved. The overdue, pending for more than 45 days, stood at Rs 3,100 crore, while the cumulative interest burden was close to Rs 325 crore. However, member companies have continued to ensure an uninterrupted supply of stock.

“Apart from delayed payments, our member companies are under increased financial stress, as they are required to pay the licence fee and label registration fees in advance for the current fiscal year. The uncertainty in payments is hurting what has otherwise been a robust business in the state. Such a scenario is not only discouraging new investments but also making existing investments in the state commercially unsustainable,” Iyer noted.

Since late 2023, payments from Telangana prohibition and excise department have been consistently delayed beyond the stipulated 45-day credit period outlined in the rate contract agreement (RCA). These prolonged delays have placed a substantial financial burden on the alcoholic beverage industry, significantly increasing working capital requirements and, consequently, interest costs.