Why India's beer industry is facing a crisis
What's the story
The Indian beer industry is facing a major crisis due to the ongoing war, which has led to increased input costs and supply shortages. United Breweries Ltd (UBL) CEO Vivek Gupta made this statement while highlighting the impact of these factors on the sector. He also pointed out that state governments impose restrictions on pricing, further complicating matters for businesses in this industry.
Call for action
Regulatory support needed for beer industry
Gupta has called for government intervention to save the domestic beer industry from this crisis. He warned that without regulatory support, growth and innovation in this sector could come to a halt. "The impact on beer is disproportionately higher than any other industry," he said, stressing the need for immediate action by authorities.
Cost concerns
War's impact on beer sector
Gupta explained that the war has had a much bigger impact on the beer industry than any other sector. He cited factors such as increased costs for bottles and raw materials, unfavorable exchange rates, and supply shortages as major contributors to this crisis.
Pricing issues
Regulatory constraints limit pricing control
Gupta also highlighted regulatory constraints that limit pricing control in the beer industry. He said roughly 75% of the business is regulated by state governments through excise policies. "We cannot even control pricing," he said, adding that he has been engaging with state authorities for relief. The UBL CEO has requested a 15% hike in selling price to the government, not consumers.
Supply issues
Can shortages
Gupta also flagged a can shortage as a major challenge for the beer industry. He said despite government notification, the issue remains unresolved and will continue to persist. "Aluminum prices are significantly increasing," he said, adding that gas shortages have forced can manufacturers to declare force majeure. This has made importing cans very expensive due to high aluminum prices.