The Telangana government has increased beer prices by 15% with immediate effect, citing revenue generation and industry demands as key factors behind the decision. The price revision, which took effect on Tuesday, comes in the wake of supply disruptions by United Breweries Limited (UBL) and demands from brewers for a price hike.

Government justifies price hike

The state government implemented the hike as part of its new excise policy aimed at boosting revenue from liquor sales. According to officials, beer prices had been increased by only 6% in the last two instances, making a steeper hike necessary to align with inflation and rising raw material costs.

A three-member price-fixing committee, consisting of a retired judge, a former IAS officer, and a chartered accountant, recommended the 15% hike after assessing beer prices in neighbouring states. Principal Secretary (Revenue) S.A.M. Rizvi authorised the Telangana Beverages Corporation Limited (TGBCL) to enforce the revised prices, which applies to all existing stock, including in-transit supplies.

With the hike, a 650ml bottle of beer is now expected to cost between ₹170 and ₹180, depending on the brand, making Telangana one of the most expensive states for beer consumption in South India.

UBL supply disruptions and industry pressure

The price increase follows a brief supply halt by UBL, which stopped supplying Kingfisher, Heineken, Amstel Bier, and London Pilsner to Telangana in January, citing stagnant prices since 2019-20. The company had demanded a 33% hike to offset losses and claimed that TGBCL had unpaid dues for past beer supplies.

Following discussions between industry representatives and the government, UBL resumed supply, while the government opted for a 15% price increase instead of the 33% requested by brewers. The Brewers Association of India (BAI) had also urged the government to raise beer prices, arguing that production costs had surged.

Telangana is India's largest beer-consuming state and one of the few where beer sales outpace hard liquor. Official data shows the state has nine distilleries and six beer factories, including one owned by UBL. Additionally, seven other beer companies sell their products in Telangana but manufacture them elsewhere.