Beer prices in India could go up due to West Asia war

Beer prices in India may rise and supplies could tighten in the coming weeks as the ongoing war in West Asia pushes up costs and disrupts key inputs, the Brewers Association of India said on Tuesday.

In a statement, the association said the industry is already facing sharp cost increases and supply constraints, warning that the situation could affect availability during the peak summer season.

The Brewers Association of India represents major beer makers including United Breweries, AB InBev and Carlsberg, which together account for about 85% of beer sold in the country.

“Costs have gone up by 12-15% due to the war, prices in some states now below cost of production,” the association said.

Over the past three weeks, the cost of key inputs has risen sharply. Glass bottle prices are up by about 20%, while paper cartons have nearly doubled. Materials such as LDPE, BOPP and adhesives have become costlier by 20–25%, and freight and logistics costs have increased by 10%. The rupee has also weakened by nearly 3% against the US dollar, adding to import costs.

Overall, brewers estimate that their costs have increased by around 12–15%.

At the same time, supply chains are under pressure. The war has disrupted aluminium supplies from West Asia, and can manufacturers have warned that prolonged disruption could affect production volumes and even lead to plant shutdowns.

A shortage of commercial LNG has also hit glass bottle manufacturers, raising the risk of partial or full shutdowns of their units.

The company said supplies of glass and cans could be severely strained in the coming months, which may directly impact beer production and availability.

With summer demand expected to rise, the industry warned that shortages could become more visible. It also flagged the possibility of force majeure situations in contracts between suppliers, brewers and buyers, including government entities.

Brewers may prioritise supplies to states that allow price increases, such as Maharashtra, Karnataka and Goa, where they can remain viable. In states where prices cannot be revised, companies may find it difficult to maintain supplies, the association added.

Any reduction in supply could also hit state revenues, as excise duties on alcohol are a major source of income.

“Coming summer season a big worry for beer. States must allow price increases to maintain supplies,” said Vinod Giri, Director General, BAI.

Calling for policy changes, Giri also said, “The current crisis highlights the need for a flexible and pragmatic policy environment. Holding prices back when the costs are rising works to no one’s benefit.”

He noted, “Inability to pass on cost increases disincentivizes a supplier to maintain supplies especially when there is a shortage and supplies need be rationed.”

He added, “Reduced supplies mean lower tax collection for the Government. As it is, low prices mean lower tax collection per unit for the Government and in this situation it may just compound the problem.”

“It is time the Governments take proactive steps to allow pricing freedom to brewers to safeguard industry viability, ensure stable consumer supply, and protect long-term state revenues,” he noted.