Bira 91, a prominent player in the craft beer scene in urban India, is currently facing a deepening crisis. In a recent development, investors have assumed control of The Beer Cafe, a popular pub chain affiliated with Bira 91, due to the company defaulting on loans secured by shares of the cafe business.
The situation has escalated to the Delhi High Court, which has intervened to halt the sale or transfer of the pledged shares temporarily. The underlying message is clear – control is slipping away, and the financial troubles are just part of the larger narrative.
Over 250 present and past employees of B9 Beverages Ltd, the parent company of Bira 91, have lodged complaints with government bodies and investors over unpaid salaries stretching back several months. Issues such as delayed payments, missing tax deductions, and unfulfilled provident fund contributions have left employees frustrated and anxious, leading to calls for a thorough investigation and the resignation of founder and CEO Ankur Jain.
The origins of the crisis can be traced back to late 2023 when Bira’s parent company underwent a transformation into a public entity, accompanied by a name change. This seemingly routine process triggered a series of operational setbacks, including delays in obtaining liquor licenses, resulting in a substantial inventory buildup without corresponding sales.
The financial fallout has been severe, with revenues plummeting to approximately Rs 638 crore in FY24 while losses ballooned to nearly Rs 750 crore. Auditors have expressed concerns about the company’s viability, exacerbated by a failed fundraising attempt and a significant decline in the company’s share price.
Internally, the organization has downsized significantly, with the workforce shrinking from around 700 to approximately 260 employees. Those remaining face ongoing uncertainties regarding payroll and outstanding dues, estimated at around Rs 50 crore.
The recent takeover of The Beer Cafe by Kirin Holdings and Anicut Capital signifies a pivotal moment, indicating a loss of internal control within the company. As competitors capitalize on Bira’s licensing challenges, the company’s future hinges on securing fresh capital, addressing governance issues, rebuilding trust with stakeholders, and stabilizing operations to avoid insolvency or drastic restructuring.
The road ahead for Bira 91 is uncertain, with its survival contingent on swift and strategic actions to navigate through the crisis and potentially salvage its brand reputation in the fiercely competitive craft beer market.