Telangana hikes beer prices by 15% from Feb 11

Hyderabad: Telangana government has hiked beer rates by 15 percent from February 11

The government has asked Telangana Beverages Corporation Ltd (TGBCL) to follow the recommendations of the three-member price fixation committee (PFC).

Orders to this effect were issued by Principal Secretary to the government S.A.M Rizvi on Monday late night. The revised pricing will apply to all IMFL (Indian Made Foreign Liquor) depot stocks, including those in transit.

A light beer, which used to cost Rs 150 earlier, will now be sold for Rs 180. Similarly, a strong beer, which used to cost Rs 160, will be sold for around Rs 200. The rate revision was delayed because the previous price fixation committee's tenure had ended a few months ago.

On January 8, United Breweries Limited (UBL) Group, the maker of Kingfisher and Heineken beer, halted the delivery of beer to TGBCL seemingly to put pressure on the government to raise prices.

The UBL claimed that TGBCL accumulated a large amount of past-due from the beer supplies. Moreover, it has not changed the basic pricing of its beer since 2019-20, resulting in a huge loss.

On January 11, Chief Minister A Revanth Reddy said that the state government would not need to heed the pressure exerted by the liquor companies. UBL had mounted pressure on the government to increase beer prices by 33.1 percent. However, beer prices have been increased by 15 percent with effect from February 11.

On January 20, the UBL announced it would resume its beer supply in Telangana after productive conversations with the TGBCL, as well as the state government‘s promise to address pricing and unpaid payment issues.

After agreeing to begin shipments, UBL informed the National Stock Exchange that it is in constructive talks with TGBCL, which has promised to resolve its pricing and overdue payment issues in a timely way.

"Until we receive additional information and assurances, we have chosen to resume supply to TGBCL for the time being. "This is an interim decision in the best interests of consumers, workers, and stakeholders," the UB Group said.

BAI welcomes beer price hike in Telangana

Welcoming the state government's move, the Brewers Association of India (BAI) urged Chief Minister A Revanth Reddy to address unresolved challenges in the beer industry.

"Though the increase being allowed is less than the increase in the cost of production or what the industry was expecting, we welcome it as it signals that the government is mindful of the concerns of the industry on business viability in the state and has followed through on its promise of looking into it," the BAI said in a statement.

"We have full confidence in Chief Minister Reddy’s leadership and wisdom, and we hope the issue of outstanding payments for beer supplies made between February and August last year will also be resolved promptly," he added.

Giri further emphasised that Telangana is a key state for the beer industry. Being a high-volume product, locally-made beer has a significant economic impact on the state's supply chain, employment, ancillary industries, logistics, and the hospitality sector.