Pernod Ricard and Heineken, two of India’s leading alcohol brands, reported a slowdown in sales growth during the March quarter, citing regulatory challenges and disruptions in Telangana, a key liquor market. While premiumization trends remained robust, temporary production interruptions and delayed customs clearance procedures hampered operations.
Pernod Ricard CFO Helene de Tissot highlighted that “a softer third-quarter sales performance” stemmed from these hurdles. Despite these challenges, the makers of Royal Stag and Chivas Regal reported a modest 1% sales growth and projected stronger momentum in the coming quarter.
Earlier this year, Pernod halted operations in Telangana over unpaid dues, while United Breweries paused sales due to operational losses. The state government, which monopolizes liquor sales through the Telangana Beverages Corporation, claimed these moves were pressure tactics to demand price hikes. Both companies resumed operations within a month.
Telangana remains one of India’s top liquor markets but faces persistent payment delays, with dues exceeding ₹4,000 crore and payments taking up to 140 days—far beyond the standard 45-day cycle.
Heineken, meanwhile, criticized state-level regulations, emphasizing the need for sustainable business models and better engagement strategies with authorities to ensure long-term growth.
The International Spirits and Wines Association of India reiterated the need for pricing freedom and ease of doing business to unlock the industry’s potential.
Source: ET
