Pernod Ricard and Heineken hope for stronger demand in the coming months
Mumbai : Two of India’s leading alcohol companies—Pernod Ricard (maker of Royal Stag and Chivas Regal) and Heineken (through United Breweries)—have reported slower sales growth during the March quarter, mainly due to regulatory hurdles and disruptions in Telangana, one of the country’s largest liquor markets.
Pernod Ricard said its sales growth was limited to just 1% during the quarter. The company blamed new customs clearance procedures that affected imported liquor sales, and a temporary halt in production in Telangana, which has now been resolved. However, the company expects demand to rebound strongly in the fourth quarter.
In January, Pernod had paused operations in Telangana over pending payments, while United Breweries stopped sales due to ongoing losses. The Telangana government accused the companies of using these moves to pressure for higher prices. Both firms resumed supply later that month.
Telangana is a key alcohol market, among the top three in the country. But it’s also tightly controlled—the government has a monopoly over both wholesale and retail liquor sales, managed through the Telangana Beverages Corporation. For nearly four years, alcohol companies have faced delayed payments worth nearly ₹4,000 crore, with delays stretching up to 140 days—well beyond the usual 45-day payment cycle.
In its earnings call, Heineken highlighted the challenges of navigating state-level regulations, which it said makes price revisions and negotiations time-consuming and inefficient. The company is now adopting a more assertive approach to ensure fair pricing and long-term sustainability in the Indian market.
According to Sanjit Padhi, CEO of the International Spirits and Wines Association of India, the key issues plaguing the industry are lack of pricing freedom and regulatory bottlenecks. He said that while some states have made progress, there’s a huge opportunity for others to adopt more supportive policies that would help the industry grow and serve the aspirations of consumers seeking premium products.
