Indian consumers could soon face higher beer prices and potential supply disruptions as global brewers operating in the country grapple with escalating costs driven by a gas shortage linked to the Iran war.
The conflict has led to a surge in the price of glass bottles and significant shipping delays for aluminium, crucial for can production. India, the world's fourth-largest importer of natural gas, is particularly susceptible to fuel availability issues, relying heavily on the Middle East for its supply, with approximately 40 per cent sourced from Qatar.
The Brewers Association of India, representing major players such as Heineken, Anheuser-Busch InBev, and Carlsberg, informed Reuters that glass bottle prices have soared by around 20 per cent. Additionally, paper carton rates have doubled, alongside increases for other essential packaging materials like labels and tape. Gas is essential to keeping furnaces and production lines running, and shortages have forced several glass bottle makers to partially or fully halt operations.
Aluminium can suppliers have also warned of possible reductions just as India heads into its peak summer season, when beer sales typically rise. “We are asking for price increases in the range of 12-15 per cent,” the association's director general Vinod Giri told Reuters. “We have advised our member companies to individually approach states.”
The rising cost of production is making some operations unsustainable, he added. While the three companies dominate India's beer sector, many smaller players such as Bira and Simba also operate in the market. The Confederation of Indian Alcoholic Beverage Companies has written to several states seeking price adjustments to offset rising freight, logistics and input costs.
Some glass bottle vendors are warning their clients of reduced supplies and have increased their prices. Nitin Agarwal, CEO of Fine Art Glass Works in Firozabad, said he has cut production by 40 per cent due to gas shortages. “We've cut production and increased prices by 17-18 per cent,” Agarwal said. The shortages have already affected India's $5 billion bottled water market with some producers increasing prices by 11 per cent.
