Brewers, beverage companies ask Telangana govt to clear dues of nearly Rs.3,400 crore

Brewers and beverage companies have urged the Telangana Government to clear pending dues of Rs 3,400 crore. With payment delays stretching up to 90 days, suppliers warn of a possible supply hit while demanding timely settlement and reduction of excise duty

Hyderabad:  Brewers and beverage companies have appealed to the Telangana Government to clear pending dues of nearly Rs 3,400 crore, warning that supplies in the State could be hit if payments are further delayed.

Of the Rs 3,400 crore dues, about Rs 2,400 crore are arrears pending for over a year in the ‘alcobev’ sector, which includes alcoholic and beverage companies. The remaining Rs 1,000 crore relates to dues that should have been cleared within 45 days as per credit terms but remain unpaid for the past few months.

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Telangana is the only southern State delaying payments. Karnataka, Kerala, Tamil Nadu and even Andhra Pradesh are clearing dues as per tender conditions.

Despite financial strain, suppliers have continued to meet commitments for the last year. However, the delay is now making it difficult for them to manage rising operational costs and additional financial burdens.

As per tender terms, the Telangana Beverages Corporation Limited (TGBCL) is required to make payments to suppliers within 45 days, but delays are stretching to nearly 90 days, creating severe stress for suppliers.

Suppliers extend TGBCL a 45-day credit period, while retailers lift stocks only against cash payments. The State Government earns nearly Rs 3,200 crore a month from the sale of alcoholic beverages. After deducting the suppliers’ share of around Rs 900 crore, the State pockets about Rs 2,300 crore every month.

Even though retailers pay in advance, the suppliers’ share is not being settled on time. Besides supplying on credit, suppliers also bear 30 percent excise duty, adding to their financial pressure.

Last July, the government had assured suppliers that it would clear dues within 10 months, but the promise was not kept.

Concerned over the continuing delay, the Brewers Association of India, the Confederation of Indian Alcoholic Beverage Companies, and the International Spirits and Wines Association of India wrote to the State Government last month, urging it to clear the dues.

The associations also demanded that the government restrict the credit period to 45 days and reduce excise duty from 30 percent to one percent.