United Breweries, United Breweries, which controls half of India's beer market, has decided to close its Ludhiana brewery in Punjab, effective June 30, 2026, after entering into a long-term capacity lease agreement with a contract brewing unit to maintain beer supplies across Punjab, Delhi and neighbouring states.
The company earlier this month said that it is preparing to pull back from parts of the country where it cannot make money, as an unprecedented surge in input costs and rigid state pricing controls force the brewer into trade-offs between growth and profitability.
Kingfisher and Heineken maker warned it will take tough calls in states where structural profitability remains weak, indicating it could cut supplies, lower promotions or deprioritise markets altogether.
"We are not going to do charity," Vivek Gupta, MD at UBL told investors. "I am not going to hesitate to take tough calls, where in the states the structural profitability is not there because of regulators. This is a time when the industry is in crisis, costs are going down."
The pressure is being amplified by geopolitical disruptions in West Asia, which executives said could keep input costs elevated for months. UBL has cut trade spending to zero in at least one market where margins were unsustainable and indicated it may refuse to match aggressive discounting by competitors in similar regions.
The strain is not limited to UBL. The Brewers Association of India has urged state governments to allow price hikes of 15% to 20% to help brewers absorb what it described as a "sudden, structural cost shock".
According to the industry body, glass bottle prices have jumped about 20%, paper cartons have nearly doubled, and key packaging inputs such as plastics and adhesives are up 20-25%. Freight costs have risen 10%, while a weaker rupee has further inflated import bills.
