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UB beer is back in Telangana

Hyderabad: United Breweries, the maker of Kingfisher and Heineken brand beer, on Monday reversed its decision to suspend beer supplies in Telangana until the government cleared its dues, and agreed to resume services to the Telangana Beverages Corporation Limited (TGBCL) with immediate effect.

The decision, which the company called as interim, came after the government reportedly assured the company of price revision in 30 to 45 days. The government also reportedly assured the company that its dues would be cleared in instalments in 12 to 13 months.

In a regulatory filing to the National Stock Exchange, the company said: “We have been in talks with TGBCL, and these have been constructive discussions. TGBCL has assured us to address our issues on pricing and outstanding payments in a time bound manner.”

“Until we get more information, basis assurances, we have decided to restart our supplies to TGBCL for the time being. This is an interim decision in the interest of consumers, workers and stakeholders. We will continue to engage with TGBCL during this period.”

The government owes `658.95 crores to UB as on date January 8. The total beer sales in 2023-24 were 547.95 lakh cases. Of this, UB sales accounted for 382.73 lakh cases. Sales up to December 2024 were 413.23 lakh cases. Of which, UB accounted for 275.22 lakh cases.

The company, according to sources, sells around 40 lakh cases on average per month in the state. Industry sources peg the share of United Breweries in the state beer market at around 72 per cent. Typically the payment to companies is made 45 days after the sale of the liquor by TGBCL.

According to officials, no company can afford to lose a big beer market like Telangana, especially ahead of summer, when the beer sales hit the roof.

Reacting to the development, M. Kameshwar Rao, president of Association of Liquor and Beer Suppliers, said two out of six breweries in the state are run by the UB Group with a capacity to produce 35 lakh cases of beer. He said the UB Group might have revised its decision based on the government’s assurance on the price hike as the cost escalation is a known fact.

As the units cannot work at more than 80 per cent of their capacity, they produce around 30 lakh cases. The other four breweries together have a capacity to produce another 35 lakh cases, Kameshwar Rao said.

“The average sale of liquor per month is 42 lakh cases. To meet the requirements of the summer season, when demand can shoot up to even 65 lakh cases in April and May, all breweries need to work at their maximum capacity,” he said.


( Source : Deccan Chronicle )
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