India’s brewers feel full brunt of Iran war-fuelled energy crisis

India | A two-week ceasefire is now in place, but a lot of damage to India’s economy has already been done by the Iran war. Just as the country enters into its peak beer sales season, brewers are bracing for a perfect storm of rising costs, packaging shortages, unresponsive price regulation, and a weak rupee.

India is especially exposed because it is the world’s fourth-largest importer of natural gas and sources about 40 percent of its supply from Qatar, which has seen its export capacity disrupted after Iranian attacks.

The Iran war has already made bottled water more expensive due to surging prices of plastic bottles and caps, while brewers have warned of price hikes and supply chain disruptions due to ⁠a shortage of gas, local media reported on 30 March.

The Brewers Association of India (BAI), which represents Heineken, AB-InBev, and Carlsberg, told Reuters that glass bottle prices have risen by around 20 percent, paper carton rates have doubled, and other packaging inputs such as labels and tape have also become more expensive. “We are asking for price increases in the range of 12 percent to 15 percent,” Vinod Giri, Director General of the BAI, said. Member companies were advised to approach state governments individually. The alcohol sector in India is tightly regulated, and increasing retail prices typically requires approval from state governments.

The strain is also spreading beyond brewers. Several Indian glass bottle makers have partially or fully halted operations because gas is essential for running furnaces, while aluminium can suppliers have warned of possible reductions.