Heineken’s Indian unit United Breweries will resume beer supplies to India’s Telangana state, the company said on Monday.
United Breweries said in an exchange filing, ‘We have decided to restart our supplies… for the time being.
‘This is an interim decision in the interested of consumers, workers and stakeholders.’
The company’s shares jumped as much as 6.3% following the news and were up 3.4% at 11.40am Indian Standard Time (IST).
However, shares are still down about 3% since the supply suspension decision on 8 January.
The ‘Kingfisher’ beer manufacturer said the interim decision was made following “constructive” talks with the government. Which assured it would address the pricing and dues in a “time bound manner.”
The Telangana government did not immediately respond to a Reuters request for comment.
Telangana is India’s top beer-consuming state, where United Breweries has 70% of the market share.
The decision to resume supplies marks a reprieve in an otherwise stressed regulatory environment where global alcohol companies such as Diageo, Pernod Ricard, AB InBev and Carlsberg are demanding about $466 million in unpaid dues.
They are also battling regulatory challenges, including antitrust investigations.
In its 8 January decision, United Breweries cited delayed payments and a lack of government approval for higher prices since 2019/20 – which hurt its finances – for halting sales to Telangana.
States in India – the world’s eighth-biggest alcohol market by volume – individually regulate the pricing of alcohol products, which are major contributors to their tax revenue.
Alcohol is bought by the state government, which then supplies it to shops in Telangana.
There, officials had rationed supplies to deter hoarding and tackle shortages.
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