International Spirits & Wines Association of India (ISWAI) has sought urgent intervention from the government of Karnataka to address the escalation in input and packaging costs being faced by the spirits industry due to the ongoing conflict in West Asia, and the resulting global energy and commodity crisis.

The sharp volatility in oil, gas, coal, and petrochemical feedstocks has triggered a structural increase in packaging costs across multiple categories, leaving little scope for manufacturers to absorb these costs through operational efficiencies or alternative sourcing, according to the association.

Sanjit Padhi, CEO, ISWAI said, India’s alcoholic beverage industry is witnessing a sharp and sustained increase in input, packaging, freight and energy costs due to the ongoing West Asia crisis, and the resulting volatility in global commodity markets.

“We urge States to consider a balanced and pragmatic approach toward price revisions to help maintain business viability, ensure uninterrupted consumer supply, safeguard employment across the value chain, and sustain the industry’s significant contribution to State excise revenues, and the broader economy,” he urged.

According to him, key packaging materials, including glass bottles, closures, labels, PET resin and cartons, have seen significant inflation over the past two years, substantially increasing overall manufacturing costs across the spirits sector.

“Since packaging constitutes a major share of operational expenditure for the industry, these externally driven cost pressures are becoming increasingly difficult for manufacturers to absorb within existing State-approved pricing structures,” Mr. Padhi stated.

Glass bottles, the primary packaging format for spirits, have been severely impacted owing to the energy-intensive nature of glass manufacturing. During 2024–25 and continuing into early 2026, elevated soda ash prices coupled with volatility in natural gas and coal have significantly increased furnace operating costs. As a result, glass bottle prices have risen by approximately 11–17%.

Similar inflationary pressures are being witnessed in plastic caps and closures, where HDPE and PP resins form a major share of manufacturing costs. During February–March 2026, global polymer markets saw steep increases, with polyethylene prices rising nearly 30% month-on-month, alongside upward revisions in domestic HDPE and PP prices. This has translated into a 15–20% increase in cap and closure costs, according to ISWAI.

John Distilleries Chairman Paul John told The Hindu that a balanced and pragmatic approach towards price revisions in regulated markets would help support business sustainability.

“The AlcoBev sector is at a breaking point,” said Abhay Kewadkar, Director, Tetrad Global Beverages and former CEO at UB Wines. He said the current scenario has triggered damaging consequences such as market destabilisation under which reputable brands were forced to exit businesses, thus creating space for illicit activities.

Aditya Khoday, Director, The House of Khoday, said the volatility in fuel prices has also resulted in a steep increase in transportation and logistics costs.

Mr. Khoday said that the widening gap between input costs and realisable prices is steadily eroding margins and pushing the industry towards an unsustainable position.