Telangana, India, is being sued by Diageo, Pernod Ricard, and Carlsberg for $466 million in debt. Due to outstanding debt, Heineken halted supply, and since 2019, the state has not authorized price increases, which has exacerbated financial problems and raised concerns in the market.
According to three industry insiders who spoke to Reuters, international alcohol companies such as Diageo, Pernod Ricard, and Carlsberg are pursuing unpaid debts worth roughly $466 million from the Indian state of Telangana, where Heineken just stopped deliveries in an unprecedented move.According to Reuters, Heineken's United Breweries declared that it will halt its deliveries to southern Telangana, India's biggest beer market, because of delayed payments. Additionally, the report stated that since the fiscal year 2019–20, the government has not authorized price hikes.has a detrimental effect on its financial status.
According to a Reuters story, the biggest beer manufacturer in India took an extraordinary move on Wednesday that caused its shares to fall 7% at a time when the company is being closely scrutinized nationwide.
The antitrust watchdog is investigating allegations of a conspiracy between Anheuser-Busch InBev and Pernod of France to boost market share, following a raid on their headquarters in December. In its article, Reuters stated that both are collaborating with Indian officials.
Liquor manufacturers are only permitted to supply state-run depots in a number of states, including Telangana, which then sell to retailers, forcing the companies to rely on state governments for payment.
According to alcohol industry insiders who spoke to Reuters on condition of anonymity, Telangana owed whisky and beer companies more than 40 billion rupees ($466 million) in unpaid arrears.
According to reports late on Wednesday, Telangana minister Jupally Krishna Rao said that United Breweries, which holds 70% of the state's market, had stopped supply as a "tactic" to pressure for price increases, which tend to lower consumer demand.
Rao said the state owes United Breweries 6.6 billion rupees ($77 million), but he did not say exactly what caused the delay.
Although he did not reveal the total amount owed to its peers, reports estimate that AB InBev owes $1.55 billion ($17 million) and Carlsberg owes about 400 million rupees ($5 million).
India's alcohol sales were estimated by Euromonitor to be $45 billion a year last year, ranking it as the world's seventh largest alcohol market by volume. The cost of alcoholic beverages, which constitute a substantial revenue stream for every state, is subject to distinct regulations.
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