Alcohol industry body CIABC urges States to revise liquor prices amid rising global input costs
New Delhi, March 24
The Confederation of Indian Alcoholic Beverage Companies urged state governments to consider price revisions for Indian Made Foreign Liquor as geopolitical tensions in West Asia drove up input and logistics costs. The industry body noted that the volatility in global crude and fuel prices, alongside significant disruptions in shipping routes, created a broad-based increase in expenses across various sectors in India.
According to a press release by the CIABC, the alcoholic beverage industry faced sustained cost pressures across its value chain even before recent escalations. The ongoing conflict in West Asia added further inflationary strain on supply chains, specifically impacting petroleum products, freight, and logistics. The industry also managed the consequences of a rising US Dollar against the Indian Rupee, which caused additional spikes in the cost of production.
Anant S Iyer, Director General of the CIABC, stated that in addition to higher fuel and transportation expenses, manufacturers witnessed significant cost escalations in packaging materials such as PET, aseptic formats, and other polymer-linked inputs.
The escalating geopolitical tensions in West Asia, a region that supplies nearly 20% of the world's crude and serves as a key supply chain hub for India, began to have a pronounced impact on Indian energy markets and trade flows. He noted that the resulting volatility in crude and fuel prices, along with disruptions in shipping routes, drove a broad-based increase in logistics and input costs across sectors within India.
Iyer explained that these materials remained closely tied to global energy price movements, making the increases cumulative in nature. These developments occurred within an already inflationary environment where the costs of raw materials and distribution rose steadily over time.
Iyer highlighted a disparity between the alcobev sector and other consumer goods. He pointed out that this was unlike other industries across FMCG and paints which effected price increases as they were devoid of government price control mechanisms.
With base prices of products in several markets remaining largely unchanged, manufacturers had a limited ability to absorb these increases, which resulted in sustained pressure on margins and overall business viability.
The Director General of CIABC formally requested state governments to evaluate timely and calibrated price adjustments for the sector. The industry emphasized that these revisions were essential to ensure continued investments, maintain a stable supply, and support the long-term sustainability of the industry.
The organization expressed a commitment to working closely with state authorities to ensure a balanced approach that safeguarded consumer interests while also protecting state excise revenues.
— ANI
Reader Comments
While I understand the global supply chain issues, the alcohol industry already makes massive profits. Maybe this is a moment to reconsider our consumption habits altogether. Health should be the priority, not ensuring cheap supply of liquor.
The logic is sound from a business perspective. If input costs are rising globally, prices have to be adjusted. States rely heavily on excise revenue for development projects. A balanced revision might be necessary to keep the industry viable and revenue flowing. 🧐
Living in India for 5 years now. The state control on alcohol prices is fascinating and so different from back home. This request highlights the tightrope walk between industry economics and social policy. Complex issue for sure.
They talk about "safeguarding consumer interests". What about the interests of families affected by alcohol abuse? Price is a deterrent. Perhaps higher prices could have some unintended positive social effects. Just a thought.
The real issue is our dependence on West Asia for crude. We need to fast-track our renewable energy and domestic production plans. Until then, every geopolitical flutter there will shake up prices here. Jai Hind! 🇮🇳
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