On March 25th, it was reported that due to a shortage of natural gas, packaging costs have skyrocketed, and Indian brewers are seeking to raise prices by 12% to 15%.
Vinod Giri, Director General of the Indian Brewers Association, stated that due to the natural gas shortage related to the Iran War, packaging costs have increased and supply has been disrupted. Brewers are seeking to raise prices by 12% to 15%.
Due to the natural gas shortage related to the Iran war, the cost of glass bottles has been pushed up and the import of aluminum from eoe aluminum can manufacturers has been delayed. Global brewers in India have warned that this could lead to price increases and supply disruptions.
Global beer brewers in India warn that natural gas shortages related to the Iran war have pushed up the cost of glass bottles
The Indian Brewers Association, representing Heineken, AB InBev, and Carlsberg, stated that glass bottle prices have increased by approximately 20%. The price of cardboard boxes has doubled, and the prices of other packaging materials such as labels and tape have also increased.
Natural gas is a critical fuel for the operation of furnaces and production lines, and supply shortages have forced several glass bottle manufacturers to partially or completely shut down. Aluminum can suppliers have also issued warnings that they may reduce production, as India is approaching the peak demand for summer beer.
Jiri stated that it has been suggested that member companies consult with each state government separately. He stated that the continuously rising production costs are making it difficult for some businesses to sustain.
According to Grand View Research, the size of the Indian beer market is expected to reach $7.8 billion by 2024 and is projected to double by 2030. The Indian Brewers Association stated that Heineken beer holds approximately half of the market share, while AB InBev and Carlsberg each hold about 19%. In addition, smaller beer brands such as Bira and Simba also operate in the Indian market.
With the advancement of urbanization and the youthfulness and affluence of population structure, the sales of beer and spirits in India have also increased. The Indian Alcoholic Beverage Companies Federation has stated that it has sent letters to multiple state governments requesting price adjustments to offset rising shipping, logistics, and raw material costs.
Due to the regulation of alcohol prices, price increases require approval from various states, with about two-thirds of states requiring authorization to implement changes. The Brewers Association stated that in states where price increases are not allowed, companies may find it difficult to maintain supply. Some glass bottle suppliers have warned customers that while raising prices, the supply may decrease.
Nitin Agarwal, CEO of Philozabad Art Glass Factory, stated that he has reduced production by 40% due to natural gas shortages. His factory supplies bottles to liquor, juice, and tomato sauce companies. We have reduced production and increased prices by 17% to 18%, "Agarwal said.
The impact extends far beyond alcoholic beverages. Due to the rising cost of plastic bottles and bottle caps, the price of bottled water in the Indian market has increased by approximately 11%.
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