By Rishika Sadam, Nandan Mandayam and Indranil Sarkar HYDERABAD/BENGALURU (Reuters) -Heineken-owned United Breweries on Wednesday stopped supplying beer to Telangana in southern India, following the state's refusal to allow price rises,

Telangana contributes 18% to United Breweries' volumes and 15% to its revenues. United Breweries has suspended beer supplies to Telangana Beverages Corporation Limited (TGBCL), the state-owned sole distributor, citing two key issues: no upward revision in base prices since FY20 despite rising costs, leading to EBIT losses, and overdue receivables.

The suspension of supply to Telangana could meaningfully impact near-term earning, given operational deleverage. But United Breweries’ ask is reasonable, Kotak said.

United Breweries said on Wednesday that it has suspended supplying beer to a state-run corporation in the southern Indian state of Telangana, which will halt sales of popular beer brands such as Heineken and Kingfisher in one of the country's top liquor-selling states.

United Breweries Ltd (UBL), the maker of Kingfisher beer, announced on Wednesday that it has suspended the supply of its beer to Telangana Beverages Corporation Limited (TGBCL), the state's sole distributor of alcohol.

Maker of Kingfisher beer, United Breweries saw a 4% share drop following its suspension of beer supply to Telangana Beverages Corporation Limited

United Breweries Ltd has suspended beer supply to Telangana due to owed payments and low state prices. The Telangana Beverages Corporation Ltd and excise department have started rationing beer stocks to depots.

Telangana is India's biggest beer-consuming state, with Kingfisher, including Kingfisher Strong, Kingfisher Ultra, and Kingfisher UltraMax, accounting for around 60 per cent of the total sales. Telangana accounts for around 15-20% of United Breweries’ beer sales and 10%-12% of the company's earnings.

United Breweries, the maker of popular beer brands such as Heineken and Kingfisher, announced on Wednesday that it has halted the supply of its beer to the Telangana Beverages Corporation Limited (TGBCL),