As the global energy supply chain wobbles in the wake of the Iran war, prices for "survival essentials" are rising even in India. Even before the full-on heat wave begins, prices for bottled water and beer are climbing one after another, quickly adding to the burden on ordinary people.
According to the BBC, Bisleri, India's No. 1 bottled water company by market share, recently raised bottled water prices by 11%. Major players such as Bailey and Clear Premium Water are also hiking prices in succession. In India, about 15% of urban households and 6% of rural households rely on bottled water. Because many areas have weak tap water infrastructure, bottled water is not a luxury but in effect "drinking water." The rise in bottled water prices directly translates into higher living costs.
The starting point for this price surge is crude oil. With the Strait of Hormuz—through which about 20% of the world's crude oil and liquefied natural gas (LNG) passes—effectively blockaded, international oil prices have recently soared to about $119 per barrel. Crude oil is a key material used to produce polyethylene terephthalate (PET) resin, the raw material for water bottles. With raw material prices jumping, PET preform prices have shot up nearly 60%, from 115 rupees per kg to about 180 rupees. In Maharashtra state, about 20% of bottling plants have halted operations.
The beer industry has not escaped the hit either. As natural gas supplies needed for glass bottle production fell 20% due to the war's impact, glass bottle prices rose by about 20%. The Brewers Association of India (BAI) has asked state governments to allow a 12%–15% increase in beer prices.
Timing is the problem. April–May is the peak of summer in India, when demand for bottled water and beverages reaches its zenith. Some companies are absorbing the expense increases and holding back on price hikes, but the industry sees additional price increases as inevitable if the situation drags on. In the market, concern is growing that a "perfect storm," where surging demand meets supply disruptions, is becoming a reality.