United Breweries stock falls over 3% as CCI fines beer ‘cartel’ of Kingfisher and Carlsberg

• ₹CCI alleges United Breweries Ltd., Anheuser Busch InBev India Ltd., and Carlsberg India Pvt. Ltd. indulged in beer cartelisation.
• United Breweries Ltd.'s stock fell over 3% in trade to ₹1,554.50 per share on Monday.
• Check out the latest news and updates on Business Insider.

United Breweries Ltd.'s stock fell over 3% in trade on Monday to ₹1,554.50 per share on news that Competition Commission of India (CCI) has fined the maker of Kingfisher beer, along with Carlsberg India Pvt. Ltd. for indulging in cartelisation in the sale and supply of beer in the country between 2009 and 2018.

The total fine is to the tune of ₹870 crore, CCI said in a press release dated Sep. 24, that alleged three beer manufacturing firms ⁠— United Breweries, Anheuser Busch InBev India Ltd., and Carlsberg India were involved in cartelisation.

While brokerage firm Motilal Oswal maintained a 'Sell' rating on the United Breweries stock, it flagged off the CCI decision as a "key investment risk."

"There are no changes to our forecasts as we await clarity on the timeline for penalty payment as well as the management’s eventual decision on whether to appeal against the penalty," it said in a Sep. 24 note.

United Breweries, it said, had a cash of ₹470 crore (net cash of ₹354 crore) at the end of fiscal 2021. "As per our current forecasts, it may have a net cash to pay the penalty of ₹752 crore by the end of fiscal 2022 (assuming that is the timeline) or else it may have to raise debt. As we have highlighted in recent years, an adverse CCI decision is a key investment risk," it said.


As per CCI, United Breweries and Carlsberg have been fined with penalties of ₹750 crore and ₹120 crore, respectively, besides a cease-and-desist order.

These are the key beer brands sold by each company:

The cartelisation, CCI alleged, was also being carried out through industry body, All India Brewers’ Association (AIBA), which represents 83 manufacturing breweries in India.

AB InBev, however, got a 100% reduction in its penalty under Section 46 of the CCI Act, which allows it to impose lesser penalties if the party involved in a cartel has made full disclosure about the alleged violations.

Earlier in 2020, Reuters had reported that the investigation was triggered by AB InBev’s disclosure to the CCI that the company had discovered a cartel when it acquired SAB Miller.

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