Iran war hits India’s alcohol industry:Associations seek govt permission for 15-20% price hike amid raw material rising costs

Alcoholic beverage makers have sought a reasonable price hike from state governments to deal with pressures arising out of rising can and bottle costs due to supply chain disruptions triggered by the West Asia crisis. Confederation of Indian Alcoholic Beverage Companies (CIABC) and the Brewers Association of India (BAI) have urged states to allow revisions of IMFL (Indian Made Foreign Liquor), wine and beer products. Additionally, the associations have asked the governments to provide interim relief measures to help manufacturers cope with rising production costs. Industry asks for 15-20% price increase BAI has asked state governments to allow suppliers a price increase of 15-20% to partially offset the impact of rising input costs. Input costs on the rise – reason In letters sent to state governments, BAI Director General Vinod Giri said the conflict has triggered a sharp increase in input costs across categories. Glass bottle prices have risen by around 20% and paper cartons have increased by almost 100%. LNG supply shortage hits glass manufacturing Severe shortage of commercial LNG supply has put glass bottle manufacturers under significant strain, and they too face partial or full shutdowns. Supply of glass and cans may be severely strained in the coming months and even years. -BAI said Rising aluminium costs hits supply of cans Aluminium supplies from the Middle East have been badly hit, and suppliers have warned that prolonged disruption risks not only output but also a shutdown of manufacturing plants. -Giri High freight costs Rupee value plunge add fuel to fire Freight and logistics costs have also increased by around 10%, while the depreciation of the rupee against the US dollar has further pushed up import costs, he added. BAI represents leading players from the brewing industry – United Breweries, ABInBev and Carlsberg – which together account for around 85% of the beer sold in the country. CIABC represents IMFL (India Made Foreign Liquor) and domestic wine makers.