India’s alcoholic beverage industry has sought urgent price relief from state governments, with both the Confederation of Indian Alcoholic Beverage Companies (CIABC) and the Brewers Association of India (BAI) warning that surging input and logistics costs triggered by the ongoing Wast Asia crisis are squeezing margins and threatening production viability.
Anant S Iyer, Director General, CIABC, has urged the state governments to consider a price revision for IMFL and Wine products due to the volatile geopolitical environment in West Asia, which supplies 20% of the world’s crude and is a predominant supply chain hub for India.
Alongside, BAI has asked State Governments to allow suppliers a price increase of 15-20 per cent to partially recover costs. The industry body has also sought, as an interim relief, a reduction in the manufacturing levies by around ₹3-5 per bulk litre to absorb rising costs.
Inflationary pressures
CIABC noted that the ongoing conflict has added significant inflationary pressures across supply chains, impacting petroleum products, logistics, and packaging inputs. Cost escalations are in PET and aseptic packaging materials, further increasing the overall cost of production.
BAI Director General Vinod Giri echoed this in his letters to various State Governments, adding that glass bottle prices have risen by around 20 per cent, paper cartons have increased by almost 100 per cent, and the cost of materials such as LDPE, BOPP, and adhesives has gone up by 20–25 per cent. Freight and logistics costs have also risen by 10 per cent. The rupee has fallen by almost 4 per cent against the US Dollar, adding to the cost of imports.
“The collective impact of these increases is around 15 per cent for brewers. This increase can not be managed through operational efficiencies. It is a sudden, structural cost shock, and judging from the extent of damage to the energy infrastructure in West Asia, it may last 3-5 years. No brewer, however efficient, can absorb such an increase in costs within the prices currently permitted by the State,” he lamented.
Aluminium supplies from West Asia have been badly hit, and Can suppliers have warned that prolonged disruption risks reduce output and result in a shutdown of manufacturing plants. The shortage of commercial LNG supply has also put glass bottle manufacturers under significant strain.
“The approaching summer season is a peak period for beer. The massive increase in cost of production, combined with supply shortages, may create a situation where, as an economic necessity for survival, suppliers start prioritising States that allow price increases to pass on the increase in the cost of production. This measure will ensure that brewers can sustain operations, maintain supplies to the State through summer, and continue to contribute to the State’s Excise revenues,” Giri noted.
Alongside, the CIABC has urged state governments to form a reasonable revision in Ex-Distillery/Winery Price (EDP/EWP) for IMFL and Wine products so companies can offset the increase in production costs. Iyer shared that a revision in EDP, along with a corresponding upward revision in Excise Slabs, would have a limited impact on consumer MRPs while helping ensure the long-term sustainability of the manufacturing ecosystem.
Published on May 6, 2026