CIABC Calls for Urgent IMFL Price Revisions Amid West Asian Tensions

Amid escalating geopolitical tensions in West Asia, the Confederation of Indian Alcoholic Beverage Companies (CIABC) appeals to state governments for IMFL price revisions due to rising logistic and input costs. The industry faces cost pressures from volatile fuel prices and currency fluctuations affecting production expenses.

The Confederation of Indian Alcoholic Beverage Companies (CIABC) is urging state governments to reconsider the pricing of Indian Made Foreign Liquor (IMFL) as geopolitical tensions in West Asia push up input and logistics costs. The industry body has identified significant disruptions in global crude and fuel prices, along with altered shipping routes, leading to a widespread increase in expenses across several sectors in India.

According to a press release from CIABC, the alcoholic beverage sector has been grappling with sustained cost pressures across its value chain, even before the recent rise in tensions. The ongoing conflict in West Asia has notably exacerbated inflationary pressures on supply chains, particularly affecting petroleum products, freight, and logistics. Coupled with the rising US Dollar against the Indian Rupee, these international developments have further spiked production costs.

CIABC's Director General, Anant S Iyer, highlighted additional cost surges in packaging materials like PET, aseptic formats, and polymer-linked inputs due to fuel and transportation price hikes. The escalating geopolitical tensions have markedly impacted Indian energy markets and trade flows, given West Asia's contribution of nearly 20% of the world's crude and its strategic significance as a supply chain hub for India.

Iyer noted that many of these materials and cost increments are directly tied to global energy price fluctuations, which compound over time. These spikes have unfolded in an already inflationary setting, where raw materials and distribution costs have been consistently on the rise. He pointed out a disparity between the alcoholic beverage sector and other segments, such as FMCG and paints, which have implemented price increases due to the absence of government-imposed price restrictions.

With base product prices remaining largely unchanged in several markets, manufacturers struggle to absorb these heightened expenses, resulting in sustained margin pressure and threatening overall business viability. The CIABC has made a formal request for state governments to consider timely and calibrated price adjustments for the sector.

The organization maintains its commitment to collaborating with state authorities to strike a balance that safeguards consumer interests while ensuring the stability of state excise revenues.

(With inputs from agencies.)