Brewing Trouble from a Simple Change
A seemingly minor alteration to the legal name of the parent company behind popular beer brand Bira 91 has triggered a massive chain reaction of regulatory setbacks, operational chaos, and internal dissent. The change from B9 Beverages Private Limited to B9 Beverages Limited during the 2023-24 financial year—simply removing the word “Private”—has proven to be anything but minor in its implications.
Employee Revolt Amid Governance Concerns
In a striking turn of events, over 250 employees have submitted a petition demanding the removal of Ankur Jain, the company’s founder. The petition, first reported by The Economic Times, points to a series of concerns, including governance lapses, delayed salary payments, and outstanding vendor dues.
“All Hell Broke Loose”: Regulatory Domino Effect
Investor D Muthukrishnan, in a viral post on X (formerly Twitter), expressed disbelief over the fallout. “Bira 91 was one of the successful start-up stories of the last decade… A procedural goof-up has led to the whole company collapsing,” he wrote. He further elaborated that the name change was perceived by various state governments as the formation of a completely new legal entity. As a result, authorities imposed bans on sales, demanded fresh licenses, new product approvals, and updated label registrations for every beer variant.
Muthukrishnan drew a parallel to Diageo India, which avoided similar turmoil by retaining the legacy name United Spirits for regulatory continuity.
Sales Halted, Crores Lost
The bureaucratic entanglement didn’t just stall operations—it burned a massive hole in the company’s finances. B9 Beverages was forced to write off inventory worth ₹80 crore while navigating label and product re-registrations. Sales dropped by 22%, and losses ballooned by 68% for FY 2023-24. The company posted a net loss of ₹748 crore, outstripping its total revenue of ₹638 crore.
Sources told ET that production came to a standstill as early as July 2024. To make matters worse, BlackRock, a prospective investor considering a ₹500 crore debt infusion, pulled out amidst the turmoil.
Mounting Dues and Strained Morale
Founder Ankur Jain responded by acknowledging delays in employee salary disbursements and even tax payments, stating that the company had yet to receive any formal notice from employees or shareholders about the petition. “We do have employee overdues that range between three and five months, depending on the level of employees,” he admitted.
Jain attributed the company’s challenges to a perfect storm of disruptive events, including the legal name transition, shifting liquor regulations, and stalled fundraising. In response, the leadership has reportedly been working on restructuring operations, focusing on core markets, and boosting profit margins.
