On June 12th, industry organizations representing 80% of the Indian liquor, eoe beer, and wine markets - the Indian Brewers Association, the Federation of Indian Alcoholic Beverage Companies, and the International Spirits and Wine Association of India - issued a joint statement accusing the southern Indian state of Telangana of violating accounting standards and owing them nearly $400 million.
The statement evaluates the outstanding amount from December 2025 to April 2026 to be 37.25 billion rupees (approximately 392 million US dollars).
Telangana is the state with the largest beer consumption in India. Like many other local governments in India, the state requires liquor companies to only supply to state-owned warehouses, which then sell to retailers, forcing these companies to rely on state government payments.
The system has long had deteriorating relationships with large beverage companies. Last year, officials in Telangana admitted that they owed the alcohol company money, but did not explain the reason for the delayed payment.
Industry insiders say that the state government has started paying new loans in advance since this month, while old debts continue to accumulate. The contract stipulates that the interest rate for early payment can be slightly lower, but this needs to be negotiated with the relevant companies, who consider the government's move as a unilateral action.
The above-mentioned association group stated that old unpaid accounts may remain unpaid and become bad debts over time, causing a huge financial burden and risk to the industry. Failure to pay old accounts first is highly likely to violate accounting standards.
For international companies, India's appeal lies in being one of the few places where alcohol demand is still growing, but there are many obstacles to profitability, including high taxes, different regulations in different states, and current payment disputes.
Pernod Ricard is currently facing antitrust lawsuits and is being pursued by India for $314 million in taxes; Meanwhile, AB InBev is dealing with a competition law case.
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