Telangana Liquor Crisis: State Owes ₹3,366 Crore, Threatening Festive Season Supply

The International Spirits and Wines Association of India (ISWAI), the Brewers Association of India (BAI), and the Confederation of Indian Alcoholic Beverage Companies (CIABC) have jointly stated that Telangana's alcoholic beverage sector is facing immense financial strain. This crisis is due to mounting dues from the Telangana State Beverages Corporation Ltd. (TSBCL), the state's sole authority for liquor procurement and wholesale. Despite strong excise collections driven by festive demand in October, TSBCL's payments to suppliers dropped by nearly 50% compared to the previous four-month average. The state is contractually obligated to pay within 45 days, a term that has been repeatedly violated. Currently, overdue receivables stand at ₹3,366.21 crore, with ₹1,959.72 crore pending since May-August 2024, unpaid for over a year. Industry representatives met state leaders, securing only a partial release of ₹484.58 crore in mid-October, with no further disbursements since. Manufacturers warn that without immediate payments, they cannot build necessary stocks for the peak festive season, which typically sees a 75% rise in demand due to new license renewals in December. This situation creates a high likelihood of product shortages during Christmas and New Year. The industry had proposed using part of the ₹3,000+ crore collected as new license fees to clear dues, but alleges the state government has shown no intent to resolve the mounting financial strain. The alcobev sector is a major revenue source for Telangana, contributing over ₹38,000 crore annually. Failure to address these dues by November 10 could lead to curtailment of supplies, impacting manufacturing units, packaging suppliers, logistics firms, and retail employment, while also damaging Telangana's reputation as an investment destination. Impact: This news has a direct and significant impact on the alcoholic beverage industry in Telangana, affecting manufacturers, suppliers, and distributors. It also highlights potential issues with government payment cycles and financial management, which can affect overall investor confidence in the state and its business environment. Rating: 7/10. Difficult terms: ISWAI: International Spirits and Wines Association of India. An industry body representing companies involved in spirits and wine. BAI: Brewers Association of India. An industry body representing beer manufacturers. CIABC: Confederation of Indian Alcoholic Beverage Companies. An industry body representing companies in the alcoholic beverage sector. TSBCL: Telangana State Beverages Corporation Ltd. The government-owned monopoly responsible for liquor procurement and wholesale distribution in Telangana. Excise collections: Taxes levied by the government on the manufacture and sale of specific goods, such as alcoholic beverages. Overdue receivables: Money owed to a company that has not been paid by the customer by the stipulated deadline. Exchequer: The government treasury, representing state revenue and funds.