United Breweries suspends supplies to Telangana Beverages Corporation

Beer maker, United Breweries has immediately suspended its supplies to Telangana Beverages Corporation (TGBC) due to significant and ongoing operating losses in Telangana.

 

“Despite our continuous efforts over the past two years, there has been no increase in the base prices offered for our products. This has resulted in escalating losses, making our operations in the State unviable,” United Breweries said in a statement.

 

The statement also added, “We have a fiduciary responsibility to all our stakeholders, and with each beer sold at a loss, it has become unsustainable for us to continue our operations. Additionally, the substantial overdue payments for the supplies made to TGBC further complicate the situation.”

 

It said that The Brewers Association of India (BAI) has made multiple representations to the Government regarding the industry-wide challenges, urging price increases to offset inflation, but unfortunately, there has been no resolution to date. 

 

“We remain committed to supporting our employees during this challenging time and deeply appreciate their hard work. Our company contributes more than Rs 4,500 crore annually to the state’s revenue. Despite the mounting financial pressures, we have ensured the uninterrupted supply of our beer, driven by our commitment to consumers and customers,” said the company’s spokesperson.

 

The spokesperson added, “We urge the state Government to take swift action and work with us to safeguard livelihoods, restore financial sustainability, and ensure the continued availability of our products.”  According to Reuters, Telangana state minister said that a retired high court judge and an independent committee is reviewing United Breweries price hike request. The minister added that depending on the committee report, the government will decide the extent of the price hike to be taken on beer without burdening the consumer.

 

The stock price of United Breweries closed 4.09 per cent lower in Wednesday’s trade to end at Rs 1,990.50 per share on NSE.