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Bottled water costs rise amid Iran war fallout
India's $6 billion bottled water industry faces mounting pressure as the conflict with Iran disrupts access to key raw materials, pushing prices higher ahead of peak summer demand.
Price hikes and supply shortages
Bisleri, the market leader, raised prices by 11% last month, increasing the cost of a 12-pack of one-litre bottles by 24 rupees ($0.26). Competitors like Bailley and Clear Premium Water have followed suit, according to Reuters.
A Data for India study found that 15% of urban households and 6% of rural households rely on bottled water, despite the financial strain, particularly in areas with limited access to clean water.
Fuel crisis drives production costs
The conflict has blocked the Strait of Hormuz, a critical route for 20% of the world's oil and liquefied natural gas, sending global fuel prices soaring. India, dependent on imports for most of its energy needs, is feeling the impact.
Vijaysinh Dubbal, president of the Maharashtra Bottled Water Manufacturers Association, attributed the price surge to rising crude oil costs, which hit $119 per barrel this week-near levels last seen at the start of the US-Israel war with Iran.
Crude oil is a key component in producing PET resin pellets, used to manufacture plastic bottles. Dubbal noted that PET preform costs have jumped from 115 rupees per kg to 180 rupees, while supply shortages have forced 20% of Maharashtra's bottle manufacturing plants to temporarily close.
Industry warns of unsustainable pressures
While some brands have absorbed costs to keep retail prices stable-with one-litre bottles still selling for around 20 rupees-Dubbal warned that this strategy is unsustainable. Demand for bottled water and beverages typically spikes during India's peak summer months of April and May.
Vaibhav Saraogi, director of Chemco Plastic Industries, a major PET preform supplier, cautioned that rising preform prices will ripple across the $1.5 billion PET packaging industry, affecting sectors from beauty to pharmaceuticals.
Glass bottle manufacturers also hit
The Brewers Association of India, representing global brands like Heineken and Carlsberg, reported a 20% increase in glass bottle prices and has requested state governments approve a 12-15% hike in beer prices, which are state-regulated.
Vithob Shet, CEO of Vitrum Glass, a leading amber glass bottle manufacturer, said natural gas supply cuts-down 20% due to government prioritization of domestic use-have forced some producers to switch to costlier oil-based alternatives.
Broader economic strain
The government has assured stable energy supplies, but commercial sectors are feeling the squeeze. Restaurants have closed due to cooking gas shortages, while ceramics, fertilizers, and aviation industries face rising costs, including soaring jet fuel prices.
"The situation is serious. Essential commodities like water and medicines cannot afford even minor supply disruptions," Shet said.
Vithob Shet, CEO, Vitrum Glass
