Global supply shock from US-Iran conflict may push beer prices up in India

The ongoing conflict between the United States and Iran, now entering its 30th day, is triggering far-reaching economic consequences, with India feeling the strain through rising costs and disrupted supplies across multiple sectors — including the beer industry.

India, which imports nearly 90 per cent of its crude oil, is particularly vulnerable due to its dependence on shipments passing through the Strait of Hormuz, a key chokepoint affected by the conflict. The situation has intensified energy shortages, especially liquefied petroleum gas (LPG), largely sourced from Gulf nations such as Qatar and Saudi Arabia.

Supply chain disruptions hit breweries

The energy crisis has begun to affect industrial production, including brewing. Gas shortages have driven up the cost of manufacturing glass bottles, a critical component for beer packaging. According to the Brewers Association of India — whose members include global giants like Heineken, Anheuser-Busch InBev, and Carlsberg — glass bottle prices have surged by around 20 per cent.

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Gas is essential to keep furnaces running in glass manufacturing units. However, recent attacks targeting gas and oil infrastructure in Qatar have curtailed export capacity, tightening global supply. As a result, several bottle manufacturers have been forced to scale down or halt production.

Logistical challenges have compounded the crisis. Disruptions in the supply of aluminium — another key material used in cans — along with rising costs of paper cartons, labels, and packaging materials, have added to the burden on brewers.

Price hikes likely amid peak season

With India entering its peak summer season — a period marked by high beer consumption — the industry is bracing for price increases. Despite suggestions of a truce by Donald Trump, there is no clear timeline for de-escalation.

“We are asking for price increases in the range of 12-15 per cent,” Vinod Giri, Director General of the Brewers Association of India, told Reuters, noting that rising production costs are making some operations “unsustainable”.

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While there has been no official response from companies such as United Breweries, Anheuser-Busch InBev, or Carlsberg, industry signals point to imminent price revisions.

Growing market faces uncertain outlook

India’s liquor market has been expanding steadily, driven by urbanisation and rising incomes. According to estimates by Grand View Research, the sector was valued at USD 7.8 billion (Rs 73,800 crore) in 2024 and is projected to double by 2030.

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However, the ongoing geopolitical tensions threaten to disrupt this growth trajectory, underscoring how distant conflicts can have tangible impacts on everyday consumer prices in India.