International Spirits and Wines Association of India (ISWAI), a leading voice for the Indian Premium Alcoholic Beverage Industry and a strong proponent of responsible consumption, has sought urgent intervention from State Government to address the unprecedented escalation in input and packaging costs being faced by the spirits industry due to the ongoing conflict in West Asia and the resulting global energy and commodity crisis.
The sharp volatility in oil, gas, coal, and petrochemical feedstocks has triggered a structural increase in packaging costs across multiple categories, leaving little scope for manufacturers to absorb these costs through operational efficiencies or alternative sourcing.
“The alcoholic beverage industry is currently witnessing a sharp and sustained increase in input, packaging, freight and energy costs due to the ongoing West Asia crisis and the resulting volatility in global commodity markets. Key packaging materials including glass bottles, closures, labels, PET resin and cartons have seen significant inflation over the past two years, substantially increasing overall manufacturing costs across the spirits sector. Since packaging constitutes a major share of operational expenditure for the industry, these externally driven cost pressures are becoming increasingly difficult for manufacturers to absorb within existing State-approved pricing structures.
In price controlled states, we urge States to consider a balanced and pragmatic approach toward price revisions to help maintain business viability, ensure uninterrupted consumer supply, safeguard employment across the value chain, and sustain the industry’s significant contribution to State excise revenues and the broader economy.”- Mr Sanjit Padhi, Chief Executive Officer (CEO), International Spirits & Wines Association of India (ISWAI)
Glass bottles, the primary packaging format for spirits, have been severely impacted owing to the energy-intensive nature of glass manufacturing. During 2024–25 and continuing into early 2026, elevated soda ash prices coupled with volatility in natural gas and coal have significantly increased furnace operating costs. As a result, glass bottle prices have risen by approximately 11–17%.
Similar inflationary pressures are being witnessed in plastic caps and closures, where HDPE and PP resins form a major share of manufacturing costs. During February–March 2026, global polymer markets saw steep increases, with polyethylene prices rising nearly 30% month-on-month, alongside upward revisions in domestic HDPE and PP prices. This has translated into a 15–20% increase in cap and closure costs.
Labels, which are mandatory for statutory and regulatory compliance, have also become significantly more expensive. Since 2024 and continuing into early 2026, polymer-based BOPP films and paper-based inputs have experienced sustained inflation driven by higher feedstock, pulp, energy, and logistics costs. Consequently, label costs have increased by 13–17%.
In select spirits segments, PET bottles have also witnessed substantial cost escalation. PET resin prices have remained volatile in the range of USD 1.00–1.10 per kg during early 2026 due to crude oil fluctuations and global supply disruptions, leading to an 8–12% increase in PET bottle costs.
Additionally, secondary packaging materials such as cartons and paperboard, critical for storage, transportation, and retail handling, have recorded cost increases of 10–14%, reflecting persistent pulp and energy inflation.
Taken together, the cumulative increase across packaging materials during 2024–25 through early 2026 represents a weighted average escalation of approximately 15–20%. Packaging constitutes nearly 40–50% of total cost of goods sold (COGS) in the spirits industry (excluding taxes). Consequently, the current energy-driven inflation is resulting in an estimated 7–10% increase in overall COGS, even before accounting for other operating pressures.