Beer companies face acute bottle shortage

Beer companies are facing an acute shortage of glass bottles this summer as bottle makers are trying to cope with huge demands from cola majors, Pepsi and Coca-Cola.

Beer makers said that the bottle prices almost doubled in months of March and April. "The cost of bottles per case went up to Rs 80 from the usual Rs 42. There was an incremental cost of almost Rs 6 on each bottle," said Ravi Kaza, head (sales), Millennium Alcobev.

According to Richard Rushton, managing director, Shaw Wallace Breweries, the shortage was acute. "We tried to rectify the situation, but were unable to do so because of the massive seasonal demand for softdrinks which fully utilised local bottle supply capacity," he said.

The beer makers have responded to the shortage by securing local supplies in unison, and supplementing it with imports. "As a result, the availability of second hand beer bottles has started to stabilise now. We expect the prices to come down to Rs 2.75 per bottle in the next three months ," Rushton added.

Sanjeev Bali, director (marketing), Mount Shivalik Breweries, said that the shortage was most severe in the northern region. "Although the situation has improved a bit, the prices of bottles is still 15 per cent higher than usual," he said.

Millennium Alcobev's Kaza said that the shortage was inevitable as there was very little increase in bottle manufacturing capacity in the country over the last three to four years despite a burgeoning beverages market.

"Also the situation worsened because the yield on beer bottles for manufacturers is the lowest. So it made good business sense for glass makers to service the cola market as the volumes and margins are much higher," he added.

According to industry estimates both Coca-Cola and PepsiCo have procured more than a million new bottles each before the start of the summer season in a bid to make the 200 ml bottles as the new industry standard.