The Federation of European Businesses in India has reached out to the Centre requesting an exemption from a 10% import duty on glass bottles and aluminum cans. In its letter, the body highlighted a growing supply crunch, noting that local manufacturers are unable to operate at peak capacity due to rising costs. Here’s all you need to know.
European Alcohol Companies Seek Tariff Relief From India
According to NDTV Profit, alcoholic beverage companies like Pernod Ricard, Anheuser-Busch InBev, Heineken and Carlsberg were among the alcohol companies seeking an exemption from a 10% import duty imposed on glass bottles and cans.
In its letter, the body pointed out that India’s $65 billion alcohol market is facing rising costs for essentials like glass bottles, cartons and labels, partly due to the ongoing conflict in the Middle East. Passing these higher costs on to consumers is difficult, as retail price revisions require government approval in most states.
Also Read: Are Beer Prices In India Set To Rise Due To The West Asia Conflict?
Why Are Prices Of Cans & Glass Bottles On Rise?
The ongoing conflict in West Asia has disrupted supply chains, leading to shortages and putting pressure on local manufacturers, who are struggling to keep up with demand. In response, European alcohol beverages companies are now seeking support from the Indian government.
According to a Reuters report citing Coherent Market Insights, the alcohol industry is facing a 15% rise in costs due to higher prices of raw materials such as cartons and adhesives. Despite these challenges, the sector is expected to grow at an annual rate of 8% through 2033.
In fact, Indian liquor companies are also now exploring imports from Southeast Asia amid fears of a shortage of cans and bottles starting May. Meanwhile, the Brewers Association of India has urged state governments to allow price hikes to help the industry cope with rising costs.
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Why are beer prices about to rise in India?
Due to the ongoing West Asia conflict, there is a supply chain disruption causing prices of cans, glass bottles and raw materials such as cartons and adhesives to go up.
Why is the Federation of European Businesses in India asking for tariff relief on alcohol tariff?
The Federation of European Businesses in India is seeking tariff relief mainly due to a growing supply and cost crisis in the alcohol industry.
Why are prices of cans & glass bottles on rise?
Amid West Asia conflict and supply chain disruption, raw materials like can and glass bottles are getting expensive.