Global Liquor Giants Seek Rs 2,985 Crore Payment From Telangana

Alcohol industry groups representing Heineken, Diageo and Pernod Ricard have urged the southern Indian state of Telangana to settle $337 million in overdue payments, saying further delay risks supply shortages and threatens business continuity, a letter seen by Reuters shows.

Telangana is one of the largest alcohol-consuming regions in the country, but has had a tense relationship with beer and liquor makers over payments for supplies to government depots.  In January, Heineken's United Breweries - which makes the popular Kingfisher beer brand -  briefly halted supplies to the state in protest.

The pending dues, dating back to May 2024, add financial strain on the industry ahead of the festive season when demand typically rises by 75%, according to the letter sent to the state's government on November 12.

Signed by the Brewers Association of India, Confederation of Indian Alcoholic Beverage Companies and International Spirits and Wines Association of India, the letter urged the state to release the 29.85 billion rupees ($337 million).

"Non-clearance of old payments and delay in current payments have created a situation which is not sustainable for the industry," the private letter said.

"Many companies will not be able to continue operations as they do not have the financial resources to do so," the letter added, without specifying any company by name.

The Telangana government did not respond to repeated requests for comment from Reuters. 

Heineken, Diageo and Pernod also did not respond to queries. 

Many regions like Telangana require liquor companies to supply only to state-run depots, which then sell to retailers, forcing the companies to rely on state governments for payment.

The alcohol sector in India, a key growth market for global beer and liquor producers, is already contending with increasingly stringent regulations, including planned tougher advertising restrictions and antitrust investigations.

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