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India: United Breweries sees 25% fall in Q3 profits
United Breweries, the largest beer seller in India, reported a 25 per cent fall in its profit for the third quarter on February 13, as inflation-wary consumers cut back on spending on its cheaper brands.
The Kingfisher beer-maker's standalone profit before exceptional items and tax fell to Rs 86.73 crore ($9.99 million) in the quarter ended December, compared to Rs 116 crore a year ago.
During the quarter, the company incurred a one-time payment of Rs 25.76 crore on account of severance pay to certain employees.
The company, majority-owned by Netherlands-based Heineken, reported a near 7 per cent rise in revenue to Rs 442 crore. This was slower than the 13 per cent growth recorded in the previous three months and 12 per cent in the corresponding quarter last year.
Persistently high inflation has forced urban consumers with relatively low disposable incomes to rein in their discretionary spending, although the more affluent consumers continue to splurge.
To cash in on the trend, United Breweries launched a new higher-priced beer, Amstel Grande, in this financial year, which helped drive sales in the reported quarter. It was also aimed at fending off competition from Anheuser-Busch InBev's Budweiser Magnum and Carlsberg Elephant.
Last month, United Breweries was also at odds with Telangana, briefly halting its supply to one of India's top beer-consuming state due to delayed payments and a lack of government approval for price increases since 2019/20.
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