United Breweries shares jump 5% as firm resumes beer supply to Telangana Beverages Corp

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26 Aug, 2025 12:21

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United Breweries shares jumped 5% on January 20 after the maker of Kingfisher beer announced that it has decided to resume the supply of its beer to Telangana Beverages Corporation Limited (TGBCL) with immediate effect.

The company said this is an "interim decision" taken in the "interest of consumers, workers and stakeholders". "We have been in talks with TGBCL, and these have been constructive discussions. TGBCL has assured us to address our issues on pricing and outstanding payments in a time bound manner. Until we get more information, basis assurances, we have decided to restart our supplies to TGBCL for the time being," the company said in an exchange filing.

United Breweries shares jumped over 5% to trade at Rs 2,052 after the announcement, as seen at 11.18 am on January 20. Notably, the shares had dropped over 4% on January 8 when the company informed exchanges about its decision to suspend supply of beer to TGBCL. The shares have so far risen around 10% in the past one year.

United Breweries on January 8 had announced that it has suspended the supply of beer to TGBCL as the company had not revised the basic price of its beer since 2019-2020, resulting in huge losses. United Breweries added that there were significant overdues that TGBCL hasn't yet paid for the past supply of its beer.

Read what more United Breweries said about suspending beer supply to TGBCL on January 8

Sources told CNBC-TV18 that United Breweries has reversed its decision only after Telangana government confirmed that it will hike prices in 30-45 days. The report also added that the outstanding dues are likely to be cleared in instalments in the next 12 to 13 months.

Notably, during a post-Q1 earnings call in July 2024, United Breweries CEO Vivek Gupta said the company has around Rs 900 crore worth dues pending from the state government. "It is impacting our working capital. And we have got an assurance that we will start getting back money. We still have an outstanding more than 6 months of dues, but I think the [Telangana] government has committed us as an association as an industry that they will give a repayment plan."

Last year, the Brewers Association of India (BAI), a federation of some of the country's largest beer makers urged the Telangana government to allow price hikes for alcoholic beverages to compensate for inflation. The state government however had rejected the plea.

TGBCL is a public sector company owned by the government of Telangana, which has a monopoly over wholesale and retail vending of alcohol in Telangana.

United Breweries competes for customers with global majors, including AB InBev, which owns brands as Budweiser, Hoegaarden, and Corona, and Carlsberg in the fast-growing alcoholic beverages market in India.