New Delhi: This summer, the US-Israeli war on Iran is brewing up a crisis for India’s beer industry, with the potential to make every pint more expensive.
According to a Reuters report, India is more vulnerable to fuel availability as the world’s fourth-largest importer of natural gas. It depends on Qatar for nearly 40 per cent of its supply. Recent disruptions to Qatari export routes have slowed the availability of gas, which is a critical resource used to power the high-temperature furnaces in glass manufacturing.
As a result, the production of glass bottles—the primary packaging for beer—has been impacted, driving up costs. And when bottles become expensive, it pushes up the price of the beer they carry.
Vinod Giri, director general, Brewers Association of India—which represents titans such as Heineken, AB InBev, and Carlsberg—described the situation as “bleak”, adding that the impact of the ongoing crisis is twofold.
“The cost of production has increased by 15-20 per cent due to a shortage of LPG and reduced supplies. Glass furnaces are shutting down, especially in Firozabad,” Giri told ThePrint. “As a result, glass prices have risen by around 20 per cent.”
He also pointed out that the rising dollar, from Rs 88 to Rs 94, has made imported materials more expensive, adding to the pressure on the industry. Aluminium cans, which make up a significant portion of beer packaging, are also affected. Many large can manufacturing units run on gas, and operations are being scaled down due to shortages.
“If plants have two or three production lines, they have already shut down at least one. This not only increases costs but also raises concerns about the availability of cans,” he said.
Glass packaging sits at the heart
Hindusthan National Glass & Industries Ltd. (HNGIL), a container glass manufacturer, is currently working closely with its energy suppliers, tightening fuel usage across operations and keeping buffer stock ready so that its furnaces don’t go cold. Any gap in furnace continuity has direct consequences on the output.
“If the LPG situation doesn’t stabilise soon, the ripple effect on the beer and alcobev industry will be hard to contain. Glass packaging isn’t optional as it sits right at the heart of the supply chain,” said Suraj Mehta, chief strategy officer, HNGIL. The brand’s clients include Calsberg, SAB Miller, United Spirits, and Molson Coors.
“A prolonged disruption, especially heading into peak demand season, could leave producers short on bottles at exactly the wrong time,” he added.
In immediate effect, HNGIL has reorganised its production schedules, reshuffled capacity between plants, and is keeping customers informed in real time rather than waiting until there’s a problem to report.
“The goal is simple: Keep their supply chains running as close to normal as possible, even when ours is under pressure,” said Mehta.
The glass manufacturer is making its case to the Ministry for Petroleum and Natural Gas.
“Glass manufacturing is foundational to several high-consumption sectors, and we believe that needs to be reflected in how LPG allocations are prioritised,” Mehta said.
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‘Production could drop by half’
India’s beer market was worth $7.8 billion in 2024 and is expected to double that by 2030. Heineken alone accounts for roughly half the market, while AB InBev and Carlsberg account for 19 per cent each.
According to Giri, it would be unfair for the industry alone to absorb rising glass costs.
“The burden should be shared between consumers, the industry, and the government. As immediate relief, state governments could consider waiving manufacturing levies such as licence and bottling fees,” he said.
The supply crunch is also likely to lead to rationing, where supplies will be directed to markets where returns are better.
Giri warned that some companies may soon be forced to cut supply to certain states where recovery does not cover production costs.
“If the gas situation doesn’t improve, production, which accounts for about 25 per cent of the industry, could drop by nearly half. It’s going to be a major hit,” Giri said.
(Edited by Prasanna Bachchhav)