Beer Industry Faces Rising Costs and Glass Supply Shortage
Beer makers say costs are bubbling over as glass supply tightens the pour
The Economic Times
Image: The Economic Times
Beer manufacturers in India are experiencing increased costs and a tightening supply of glass bottles, which constitute 40-45% of production costs. The industry is seeking a 15-20% price increase and faster payment settlements from state governments to manage these pressures, as demand for beer begins to recover.
- 01Beer makers face a 15-20% price increase due to rising costs and glass supply shortages.
- 02Glass bottles account for 40-45% of production costs, used in 80% of sales.
- 03Energy constraints and gas shortages are impacting bottle production.
- 04Industry representatives are engaging with state governments for support on pricing and taxation.
- 05Continued collaboration between industry and policymakers is vital for stability.
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Beer manufacturers in India are grappling with rising costs due to a shortage of glass bottles, which account for 40-45% of their production expenses and are used in approximately 80% of sales. As demand for beer begins to recover, the industry is advocating for a 15-20% price increase and quicker settlement of dues from state governments. Vinod Giri, director general of the Brewers Association of India, noted that while aluminium supply remains stable, energy constraints are significantly impacting bottle production. Although gas supplies have improved, they are still below pre-February levels, exacerbating the cost pressures. The industry is urging state governments to share the rising cost burden and is exploring cost efficiencies and tighter capital discipline to navigate these challenges. Continued dialogue between industry leaders and policymakers is essential to ensure consistent supply and support state revenues, according to United Breweries CEO Vivek Gupta.
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The rising costs and glass supply issues may lead to higher beer prices for consumers, affecting their purchasing decisions. Additionally, state revenues could be impacted if pricing pressures persist.
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