Liquor Industry Protests Telangana's Payment System
They appealed to the government not to proceed with the proposed arrangement and instead ensure that outstanding payments are settled first
HYDERABAD: Leading associations representing India’s alcoholic beverage industry on Friday expressed serious concern over the Telangana government’s decision to implement a new payment mechanism for liquor suppliers from June 1, and urged the state to clear pending dues of more than ₹3,700 crore before enforcing the revised system.
The three major industry bodies — the Brewers Association of India (BAI), the International Spirits and Wines Association of India (ISWAI) and the Confederation of Indian Alcoholic Beverage Companies (CIABC) — which together account for over 80 per cent of liquor, beer and wine sales in the country, have jointly written to the Telangana government protesting the move.
According to the associations, the government has introduced a mechanism under which payments for supplies to the Telangana State Beverages Corporation Limited (TGBCL) are released after 15 days, subject to deduction of an early-payment cash discount ranging between 2 and 2.75 per cent. The system came into effect on June 1, and payments for supplies made during May 2026 have already been processed under the new arrangement.
The industry bodies contended that while cash discount provisions exist in tender conditions, they are meant to be exercised at the request of suppliers and not unilaterally by the buyer. They argued that the move violates standard accounting and commercial practices, especially when large undisputed dues remain unpaid.
In their representation, the associations pointed out that payments have been cleared only up to the first week of December 2025, while outstanding dues amounting to ₹3,725.73 crore for supplies made between December 2025 and April 2026 are still pending.
The associations said they found the government’s decision to deduct early-payment discounts on current supplies while older dues remained unsettled “very disturbing” and contrary to normal commercial principles. They warned that the practice could result in non-compliance with accounting standards and invite scrutiny from auditors.
Industry representatives also expressed concern that the government could divert monthly payouts towards newer dues to avail the cash discount while leaving older receivables unpaid. Over time, they cautioned, this could lead to legitimate receivables turning into bad debts, creating substantial financial risks for companies in the sector.
The associations urged the Telangana government to release payments strictly in chronological order and clear the long-pending dues immediately. They appealed to the government not to proceed with the proposed arrangement and instead ensure that outstanding payments are settled first.
However, the industry bodies alleged that the government appeared determined to continue with what they described as a unilateral and arbitrary decision, driven by its financial requirements and confidence in its dominant position as the sole purchaser of alcoholic beverages in the state.
