Global Alcohol Firms Demand $466 Million from Telangana Amid Supply Disruptions

IN
Published:

Global alcohol companies, including Diageo, Pernod Ricard, and Carlsberg, have collectively demanded approximately $466 million in unpaid dues from India's Telangana state. This request follows Heineken's United Breweries announcing a suspension of supplies to Telangana, the largest beer consumer in India, citing delayed payments and regulatory issues regarding price increases.

In India, which ranks as the eighth-largest alcohol market globally with an estimated $45 billion in annual revenues, individual states regulate alcohol pricing, making timely payments from government entities crucial for companies. The Telangana state is reported to owe substantial amounts to various alcohol brands, including 6.6 billion rupees to United Breweries, 400 million rupees to Carlsberg, and 1.5 billion rupees to Anheuser-Busch InBev. Additionally, Pernod Ricard and Diageo are demanding 15 billion and 10 billion rupees, respectively.

The situation has raised concerns within the industry, with trade associations warning that overdue payments hinder operations and future investments. As regulatory scrutiny intensifies, particularly around alleged collusion between major players, the industry's stability is facing challenges.

The Telangana government has acknowledged the outstanding dues but did not provide specific reasons for the payment delays. The conflict has caused a notable impact on share prices for United Breweries, which recently fell by 7%.

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