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Breaking the deadlock over supply of beer to the Odisha market, the leading beer manufacturers have entered into agreement with the Odisha State Beverages Corporation (OSBC) for supply of the frothy drink at last year's price.
A dispute over supply price had led to the deadlock that saw the major brewers refusing to sign supply contract with OSBC, the sole wholesale distributor of alcoholic drinks in the state. As a result, beer had vanished from the shelves of all liquor shops in the state.
The beer makers were opposing 20 per cent reduction in offer price in the new excise policy of the state for 2015-16. Leading manufacturers like SABMiller India Ltd, Carlsberg India Pvt Limited, United Breweries Ltd, MP Beer Products Ltd and Devans Breweries Ltd did not sign the supply pact with OSBC to express their resentment. Together these five suppliers have more than 70 per cent market share in the state.
Challenging the government's decision on reduction in offer price, United Breweries, SABMiller India, Carlsberg India Pvt Ltd and Fortune Spirit had gone to the court.
The Odisha High Court, in its interim order, has said that the beer makers for the time being will supply beer at the last year's price. But the price fixation committee of the state government will negotiate with the beer manufacturers to fix the price to be paid to the beer supplier. Any differential amount, therein, will be deposited in an interest bearing account. The negotiated price is provisional till the disposal of the case.
"They have signed the agreement at last year's price. The suppliers will be paid Rs 92.50 fixed by the price fixation committee and the balance amount will be kept in an interest bearing account," said Dwijaraj Kar, managing director, OSBC.
The war between the state government and beer majors over fixation of offer price had resulted in shortage of the beverage in the market and taken a toll on the revenue earnings. The revenue collection has dipped by 68 per cent in April to Rs 11.93 crore compared to Rs 36.83 crore earned in April 2014. Similarly, the revenue has dropped by 37 per cent in May 2015 to Rs 32.78 crore compared to same period of the previous year.
