Alcoholic beverage industry seeks price hike as rising costs from West Asia crisis

India’s alcoholic beverage industry has urged state governments to allow price hikes for liquor, beer and wine products as rising input costs linked to the West Asia crisis continue to disrupt supply chains and increase manufacturing expenses.

The Confederation of Indian Alcoholic Beverage Companies (CIABC) and the Brewers Association of India (BAI) have sought revisions in prices of IMFL, wine and beer products, citing sharp increases in packaging, logistics and raw material costs.

The Brewers Association of India requested state governments to permit a 15-20 per cent increase in product prices to offset mounting production expenses. According to the association, disruptions caused by the West Asia conflict have significantly impacted supplies of glass bottles, aluminium cans and packaging materials.

BAI Director General Vinod Giri said glass bottle prices have increased by nearly 20 per cent, while paper carton costs have almost doubled. Materials such as LDPE, BOPP and adhesives have also become costlier by 20-25 per cent.

The association warned that shortages in commercial LNG supply are putting pressure on glass manufacturers, especially units dependent on gas supply, increasing the risk of partial shutdowns and supply shortages in the coming months.

Beer manufacturers are also facing difficulties due to rising aluminium prices and disrupted can supplies linked to instability in the Middle East. Industry representatives said prolonged disruption could affect manufacturing operations and output levels.

Apart from raw material costs, freight and logistics expenses have risen by around 10 per cent, while rupee depreciation against the US dollar has further increased import-related costs.

As an interim relief measure, the brewers’ body also requested a reduction in manufacturing levies by Rs 3-5 per bulk litre to help producers manage rising operational expenses.

Meanwhile, the CIABC, representing IMFL and domestic wine makers, has urged states to revise ex-distillery and ex-winery prices. The industry body said the geopolitical tensions in West Asia — a key global crude oil supplier and major trade route for India — have intensified inflationary pressures across the sector.

According to CIABC, gas supply restrictions in Uttar Pradesh’s Firozabad glass manufacturing hub have added further pressure on bottle production, forcing manufacturers to rely on costlier spot LNG and LPG supplies.

The industry body also highlighted rising ocean freight rates and emergency conflict surcharges imposed by shipping companies on routes connected to West Asia and the Indian subcontinent.