Shares of United Breweries Ltd soared 6% on 20 January after the company announced their plans to resume supplying its beer to Telangana Beverages Corporation Limited with immediate effect.

The company described this as an “interim decision” made in the “interest of consumers, workers, and stakeholders.” It stated, “We have been engaging in constructive discussions with TGBCL, who has assured us of addressing our concerns regarding pricing and outstanding payments within a specified timeframe. Based on these assurances and pending further information, we have decided to resume our supplies to TGBCL for now,” the company shared in a stock exchange filing.

Earlier, on 8 January, the company announced that it had suspended the supply of beer to Telangana Beverages Corporation Limited as it had not revised the basic price of its beer since 2019-20, which resulted in significant losses. 

The company added that there were significant overdues, and Telangana Beverages Corporation Limited failed to pay for the previous beer supply. 

According to the news outlet CNBC-TV18, the company reversed the decision after the Telangana government confirmed that they would hike prices in 30-45 days, and the previous dues would be cleared in instalments during the next 12 to 13 months.

Last year, the Brewers Association of India (BAI), representing some of the country’s leading beer manufacturers, requested the Telangana government to permit price increases for alcoholic beverages to offset inflation. However, the state government denied the request.

TGBCL, a public sector enterprise owned by the Telangana government, holds exclusive control over the wholesale and retail distribution of alcohol in the state.

At 12:55 pm, the shares of United Breweries were trading 4.94% higher at Rs 2,047.80 on NSE.

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