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,

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

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 decision has been taken due to the non-revision of the basic price of the company's beer from 2019-20 by Telangana Beverages Corporation, resulting in huge losses in the state

TGBCL's failure to revise the basic price of the company’s beer since fiscal 2020 is one of the reasons behind the suspension, United Breweries said.

United Breweries said the unpaid dues by Telangana Beverages Corp had made the continued supply of the company's beer to the state-owned beverage firm "unviable."

United Breweries Ltd has halted beer supply to Telangana Beverages Corporation Ltd due to a longstanding issue over unrevised pricing since 2019-20, leading to substantial losses. Additionally, unpaid dues from the corporation have contributed to making the supply financially unfeasible.

Kingfisher beer will not be avaialble in Telangana now, as the beer maker United Breweries has suspended supply to the Telangana Beverages Corporation Ltd

United Breweries said the unpaid dues by Telangana Beverages Corp had made the continued supply of the company's beer to the state-owned beverage firm "unviable."

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.

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.