The Brewers Association of India (BAI) has urged the Telangana government to either approve an immediate price hike for beer or allow companies to set prices based on market demand and production costs, similar to neighboring states like Karnataka and Maharashtra.
The association, which represents major beer makers like United Breweries, AB InBev, and Carlsberg, says that production costs have surged by 35-40% since 2019, but the government has not adjusted beer prices to reflect these increases. As a result, beer companies in Telangana are struggling financially, with prices in the state 30-50% lower than in surrounding regions.
BAI director general Vinod Giri explained that the prices set by the government are based on 2019 figures, making it unsustainable for breweries to operate in Telangana. He warned that the lack of price adjustments is deterring future investments in the state.
Additionally, the beer industry is dealing with delayed payments from the government, further complicating the situation. BAI highlighted that beer prices have only been increased twice in the last seven years, despite production costs rising by 50% during the same period.
BAI is calling for either a price hike or a system where prices are automatically adjusted to match inflation, ensuring that beer companies can cover their costs while maintaining government tax revenue. Without action, they warn that the beer industry in Telangana could face even greater financial challenges.
