HYDERABAD: Of Rs 3,600 crore that the Telangana Beverages Corporation Ltd (TGBCL) owes to different liquor companies, around Rs 2,700 crore — 75 per cent of it — was pending from the previous BRS government. Of the Rs 32,000 crore to Rs 34,000 crore that the state earns through liquor sales, 15 per cent revenue accrues from the sale of beer, which is now at the centre of a controversy. The UB Group, maker of Kingfisher and Heineken brands of beer, which threatened to stop supply to TGBCL has a 72 per cent share of the state’s beer market. This amounts to around eight per cent of the overall revenue that the state gets from the sale of alcoholic drinks. Sources in TGBCL say that a three-member committee, headed by a retired High Court judge, a chartered accountan and a retired IAS officer, tasked with arriving at the rates of liquor was appointed six months back and was in the process of arriving at a fair rate. The term of the earlier committee ended six months back. M. Kameshwar Rao, president of the Association of Liquor and Beer Suppliers, said, “The price of beer is low but the taxes are twice as much as in many other states. A beer bottle costs Rs 15 and a case of 12 bottles costs Rs 180.” He said that the ingredients such as barley, maize, electricity, demineralised water cost around `180. The transport cost from the production plant to TGBCL depot is Rs 20 per case. “When you sum these up, the cost of 12 beer bottles would be Rs 380 but the Telangana government is paying only Rs 289.22,” Kameshwar Rao said. A bottle cannot be used more than five times. “The bottles break if we try to use them beyond five times. So 50 per cent of them have to be replaced,” he added, explaining the rationale for seeking higher prices. In a release, the UB Group said, “Our current basic prices are based on the cost submission to TGBCL, with no subsequent revision in basic prices till date. In the last five years, we have seen a high inflation in commodities and cost of operations, which make us suffer losses on supplying to TGBCL for several months.” “We have consistently communicated the issue of delayed price revisions in multiple meetings with TGBCL and have submitted formal representations to the government. In July-August 2024, along with the beer industry, we too made a detailed presentation to the Price Fixation Committee.” “We explained the current levels of cost of the raw materials and operations, and how and why manufacturing is being unsustainable at the existing basic price levels,” the UB statement noted. The company said that 70 per cent of the consumer price for beer brands consists of state taxes, including duties, VAT, and other levies. “Our current basic price, which encompasses the cost of manufacturing and supplies to TGBCL, accounts for only 16 per cent,” it said. Karnataka Karnataka AP AP Telangana Telangana Brand Pack Size Purchase price for govt MRP for people Purchase price for govt MRP for people Purchase price for govt MRP for for people Kingfisher Lager 650 ml Rs 56.5 Rs 185 Rs 32.92 Rs 180 Rs 24.10 Rs 150 Kingfisher Strong 650 ml Rs 56.5 Rs 185 Rs 37.08 Rs 200 Rs 26.15 Rs 160 All prices per bottle. Source: Liquor industry
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