Excise duty biggest challenge for beer industry: Kingfisher maker's CEO
Excise duty remains the biggest challenge to beer business in the country, Vivek Gupta, managing director and chief executive officer of
United Breweries
, said on Thursday.
"The worry part is the increase in duty. We saw the impact of that in Telangana and Karnataka. Duty is posing to be the biggest threat," Gupta told analysts in the earnings call post fourth quarter results.
Karnataka last week increased tax on the manufacturing cost of beer to 205 per cent , from the earlier 195 per cent , thereby impacting the MRP of both mass and premium brands. In Telangana, too, prices went up 15 per cent in February.
However, "despite the disruption, we are in the middle of the season, (and) we feel confident," Gupta said.
The country's largest brewer plans to increase its production capacity this fiscal, he said.
United Breweries will also increase cooler installation in retail outlets across the country this fiscal. In Maharashtra alone, it plans to increase cooler penetration from the current 10-15 per cent retail outlets to 50 per cent over the next couple of years, according to Gupta.
He, however, declined to share the proposed capital expenditure figure for 2025-26.
The maker of Kingfisher and Heineken beers had a capex of Rs 254 crore in 2024-25, up by Rs 64 crore from the previous year, which was used in commercial and supply chain initiatives to drive growth.
Its standalone revenue for the fourth quarter declined 7.5 per cent year on year to Rs 4,425.5 crore. Its net profit grew by 20.5 per cent to Rs 97 crore, buoyed by increasing demand for premium brands.
The company posted 24 per cent volume growth for its premium portfolio during the quarter while its overall volume sales rose 5 per cent .
"We see strong growth from Kingfisher Ultra, Kingfisher Ultra Max and Heineken Silver and we continue to drive premium volume growth," the company said in its earnings report.
"After receiving an overwhelming response in Maharashtra and West Bengal, we also introduced Amstel Grande in Uttar Pradesh, a vibrant market with a growing demand for premium beverages," it added.
For 2024-25, UBL sales grew by 5.6 per cent on year to Rs 19,400.8 crore and net profit rose 7.8 per cent to Rs 441 crore.
United Breweries' shares closed at Rs 2,159 on the BSE on Thursday, down 1 per cent from the previous close.
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