(Reuters) – United Breweries may raise beer prices further in India’s Telangana, a top official said, days after the country’s largest beer-consuming state permitted brands to do so for the first time in five years.
The southern Indian state’s decision on Tuesday came as a much-needed reprieve for the company, which had briefly halted its supply to the state.
The Kingfisher beer maker, majority-owned by Dutch liquor giant Heineken, had earlier this year said it was facing delayed payments and a lack of government approval for price increases for about five years.
The company has a 70% market share in Telangana and brings in 15% to 20% of its revenue from the state, where it is currently not profitable.
United Breweries is “not fully out of the red” in Telangana, CEO Vivek Gupta said on an earnings call, adding that the company expects another price increase in the state in the “very, very near foreseeable future”.
Separately, United Breweries also said beer sales in January was weak, partly due to the supply halt in Telangana, even as it added sales had rebounded in February. It did not directly quantify the impact of the supply halt.
On Thursday, United Breweries reported a 25% fall in its quarterly profit, as inflation-wary consumers cut back on spending on its cheaper beers in a few states including West Bengal and Tamil Nadu.
(Reporting by Ashna Teresa Britto in Bengaluru and Praveen Paramasivam in Chennai; Editing by Leroy Leo)
