Global Alcohol Firms Demand $466 Million from Telangana as Payments Dispute Escalates

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Major global alcohol companies, including Diageo, Pernod Ricard, and Carlsberg, are pressing the Indian state of Telangana to settle unpaid dues amounting to approximately $466 million. This demand follows Heineken's United Breweries halting supplies in Telangana, India’s largest beer market, due to delayed payments and the government's failure to approve price increases since the fiscal year 2019/2020.

The alcohol market in India is the eighth largest globally, generating annual revenues estimated at $45 billion. However, the industry faces challenges due to strict state regulation of alcohol pricing and distribution. Telangana reportedly owes around 40 billion rupees to various whisky and beer companies, prompting concerns about the financial stability of suppliers.

Telangana's Minister, Jupally Krishna Rao, acknowledged the state owes United Breweries 6.6 billion rupees but described the suspension of supplies as a "tactic" for negotiating higher prices, which could ultimately impact consumer demand. The minister did not disclose the total unpaid amounts owed to other alcohol companies; however, reports indicate that Carlsberg is owed nearly 400 million rupees, and AB InBev has around 1.5 billion rupees pending.

Industry representatives have expressed that the lack of timely payments is severely hampering operations and investment plans. The Brewers' Association of India, along with other stakeholders, warned that outstanding dues could exceed $606 million, indicating a significant impact on the alcohol sector's future in Telangana.

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