The ongoing conflict between the United States and Iran, which marks 30 days on Saturday, has not only led to oil shortages and an energy crisis, but has also affected the supply and resulting inflation of a wide range of products, from plastics, cosmetics, food and even alcoholic beverages.
India, although thousands of miles away from the battle zone, remains on the cusp of its influence. India imports 90% of its crude oil needs, with half the amount coming through the Strait of Hormuz, a narrow passage that has emerged as a metaphor in the conflict.
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India imports the majority of its LPG needs from Gulf countries, especially Qatar and Saudi Arabia, which are the two countries most affected by the conflict.
While the country has reported a shortage of LPG, global breweries operating in India have now warned of supply disruptions and rising prices due to the gas shortage.
Why the Iran War drove up beer costs
Gas shortages mean higher cost of beer bottles and shipping delays mean shortages of raw materials, such as aluminum, required in manufacturing.
The Indian Brewers Association, which includes companies such as Heineken, Anheuser-Busch InBev and Carlsberg, said prices of glass bottles have risen by about 20 percent, Reuters reported.
Gas remains an essential commodity required to keep furnaces and production lines running. Iran’s attacks on Qatar’s gas and oil facilities partially disrupted export capacity, reducing gas availability.
Read also: “We are comfortable with India”: Former Trump administration official questions Pakistan’s mediation in the truce between Iran and the United States
As a result, the shortage has forced many bottle makers to partially or completely halt their operations.
The impact on logistics has led to aluminum supply disruptions, leading to potential cuts. Aside from production, the packaging of the final product has also been hit, with prices of cardboard and other packaging materials such as labels and tapes rising.
What to expect at the prices
Despite Trump’s truce suggestions, there is no specific timetable on a potential slowdown in the ongoing war. The gas shortage and supply chain disruption come as India heads into the peak summer season, when beer sales typically surge.
Read also: Trump’s dramatic reversal on the Strait of Hormuz: from who will “open himself up” to recognizing Iran’s control
“We are demanding price increases of 12-15 percent. We have advised our member companies to approach the states individually,” Vinod Giri, director general of the Indian Brewers’ Association, told Reuters.
The high cost of production makes “some operations unsustainable,” Gerry said. There was no official word from Heineken’s United Breweries unit in India, Anheuser-Busch InBev or Carlsberg.
Liquor sales have grown steadily in India along with increasing urbanization and an increasingly affluent population. According to estimates from Grand View Research, the alcoholic beverage market is worth $7.8 billion ( $73,800 crore) in 2024, and is expected to double by 2030.
