Indian brewers warn of beer shortages as US-Iran war hits supply
Global brewers in India are warning of price hikes and potential supply chain disruptions, due to a gas shortage triggered by the war in Iran.
Last week, wine businesses, from producers and merchants to closure manufacturers, told the drinks business that they were bracing for the impact of the conflict, with some companies even introducing force majeure clauses to protect themselves.
And now, breweries in India have reported that the war has driven up the cost of key raw materials, particularly glass bottles, while also causing shipping delays for aluminium used in can production.
The Brewers Association of India, which represents major companies including Heineken, Anheuser-Busch InBev and Carlsberg, told Reuters that the price of glass bottles has risen by about 20%. Paper carton costs have doubled, alongside increases in other packaging materials such as labels and tape.
India, the world’s fourth-largest importer of natural gas, is especially vulnerable to such disruptions. The country relies heavily on supplies from West Asia, with around 40% of its natural gas imported from Qatar. But Iranian attacks on Qatar’s gas facilities have significantly hit its exports, meaning there’s less gas to go around for Indian producers.
Natural gas is critical for keeping furnaces and production lines running, and shortages have forced some glass manufacturers to scale back or halt operations.
Suppliers of aluminium cans have also warned of possible reductions in output, just as India approaches its peak summer season when beer consumption typically rises.
“We are asking for price increases in the range of 12-15%,” the association’s director general Vinod Giri told Reuters. “We have advised our member companies to individually approach states.”
He added that rising production costs are making some operations unsustainable.
Wider industry impact
The Confederation of Indian Alcoholic Beverage Companies, which represents many domestic producers, said it has written to several state governments seeking approval for price increases to offset rising freight, logistics and input costs.
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India’s alcohol sector is tightly regulated, meaning companies typically require government approval to raise retail prices. Around two-thirds of the country’s 28 states must authorise any changes.
“Brewers may find it difficult to maintain supplies in states that do not allow price increases,” the association said.
Some glass bottle suppliers have already warned clients of reduced availability while raising prices.
Nitin Agarwal, chief executive of Fine Art Glass Works in Firozabad, a major glass-making hub in the northern state of Uttar Pradesh, said his factory has cut production by 40% due to gas shortages.
“We’ve cut production and increased prices by 17-18%,” Agarwal said.
India’s beer market, valued at $7.8bn (£6.1bn) in 2024, is expected to double by 2030, according to Grand View Research. Heineken accounts for roughly half of the market, while Anheuser-Busch InBev and Carlsberg each hold around 19%, the brewers’ association said.
And the impact is being felt across the globe. In the UK, beer drinkers can also expect climbing pint prices, with the price of Brent crude increasing, and European gas prices ticking up.
“Beer businesses are particularly vulnerable when oil and gas prices rise because the impact is felt at several different points in the chain,” Molly Monks, insolvency expert at Parker Walsh, told the drinks business.
“We would expect the impact to begin feeding through relatively quickly, often within a matter of weeks rather than months, particularly where businesses are not locked into fixed energy contracts,” she added.
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