Alcoholic Beverage Industry Pushes for Price Increases Amid Rising Costs from Middle East Crisis
Alcoholic beverage industry seeks price hike as costs rise amid Iran war
Business Standard
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The Confederation of Indian Alcoholic Beverage Companies (CIABC) and the Brewers Association of India (BAI) are urging state governments in India to approve price hikes of 15-20% for alcoholic beverages. This request comes as rising costs for materials, particularly due to supply chain disruptions linked to the ongoing conflict in the Middle East, impact production.
- 01CIABC and BAI request a 15-20% price increase for alcoholic beverages.
- 02Rising costs for glass bottles and packaging materials are straining production.
- 03The conflict in the Middle East has disrupted supply chains, particularly for aluminium and glass.
- 04Freight costs have risen by around 10%, exacerbated by the depreciation of the Indian rupee.
- 05Interim relief measures, including reduced manufacturing levies, are also being sought.
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The Confederation of Indian Alcoholic Beverage Companies (CIABC) and the Brewers Association of India (BAI) are advocating for a 15-20% price hike for alcoholic beverages in response to rising production costs driven by supply chain disruptions linked to the ongoing conflict in the Middle East. BAI Director General Vinod Giri highlighted that prices for glass bottles have surged by 20%, while paper cartons have nearly doubled in cost. The beer industry is particularly affected, facing shortages of aluminium cans as supplies from the Middle East have been severely impacted. Freight and logistics costs have increased by approximately 10%, compounded by the depreciation of the Indian rupee against the US dollar, which has further inflated import costs. To alleviate these pressures, BAI has requested a reduction in manufacturing levies by ₹3-5 (roughly $0.04-$0.06) per bulk litre. CIABC, representing Indian Made Foreign Liquor (IMFL) and domestic wine makers, has also called for revisions in pricing structures to address these challenges. The volatile geopolitical situation is intensifying inflationary pressures across the industry, affecting both production and supply chain stability.
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The proposed price increases could lead to higher retail prices for alcoholic beverages, affecting consumers and potentially altering purchasing behavior.
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