India's Beer Industry Faces Supply Crisis Amid Iran War Gas Shortages
Indian consumers are bracing for higher beer prices and potential supply disruptions as global brewers operating in the country confront escalating production costs driven by a severe gas shortage linked to the ongoing Iran war. The conflict has triggered an energy crisis that is rippling through manufacturing supply chains, with glass bottle prices surging and aluminium shipments facing significant delays.
Gas Shortages Cripple Production Lines
India, the world's fourth-largest importer of natural gas, relies heavily on Middle Eastern supplies, with approximately 40 per cent sourced from Qatar. Iranian attacks have partially hampered Qatar's export capacity, tightening gas availability for Indian manufacturers. This fuel is essential for keeping furnaces and production lines operational, and shortages have forced several glass bottle makers to partially or fully halt operations.
The Brewers Association of India, representing major players including Heineken, Anheuser-Busch InBev, and Carlsberg, has reported 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.
Price Increases and Supply Concerns
"We are asking for price increases in the range of 12-15 per cent," said the association's director general Vinod Giri. "We have advised our member companies to individually approach states." He added that the rising cost of production is making some operations unsustainable.
Aluminium can suppliers have also warned of possible reductions just as India heads into its peak summer season, when beer sales typically rise. The market was worth $7.8 billion in 2024 and is expected to double by 2030, according to Grand View Research. Heineken alone accounts for roughly half the market, while AB InBev and Carlsberg each account for 19 per cent.
Regulatory Hurdles and Industry Impact
India's alcohol sector is tightly regulated, with around two-thirds of the country's 28 states needing to authorise retail price changes. "Brewers may find it difficult to maintain supplies in states that do not allow price increases," the association cautioned. The Confederation of Indian Alcoholic Beverage Companies, representing many domestic firms, has written to several states seeking price adjustments to offset rising freight, logistics and input costs.
Nitin Agarwal, CEO of Fine Art Glass Works in Firozabad, a glass-making hub in northern Uttar Pradesh state, said he has cut production by 40 per cent at his glass bottle making factory due to gas shortages. "We've cut production and increased prices by 17-18 per cent," Agarwal noted. His customers include many liquor companies as well as producers of juice and ketchup bottles.
Broader Supply Chain Consequences
The crisis is extending beyond the beer industry. India's $5 billion bottled water market has already been affected, with some producers increasing prices by 11 per cent due to rising rates of plastic bottles and caps. An executive at Lotte Chilsung Beverage, a leading South Korean soft drinks company, confirmed the seriousness of the situation, stating they have up to three months of inventory for plastic bottles and materials.
While Heineken's India unit United Breweries, Anheuser-Busch InBev and Carlsberg did not respond to queries, the industry faces mounting challenges. Beer and liquor sales in India have grown steadily alongside rising urbanisation and a young, increasingly affluent population, but the current supply chain disruptions threaten this growth trajectory during the crucial summer months.
