Brewers Association of India calls for 15–20 per cent price hike as United Breweries shuts Ludhiana brewery and signals deeper market rationalisation amid rising input costs and weak state-level profitability
The Brewers Association of India has called on state governments to permit beer price increases in the range of 15 per cent to 20 per cent, arguing that the industry is facing what it described as a “sudden, structural cost shock” that brewers are struggling to absorb.
Amid mounting cost pressures, United Breweries, which accounts for roughly half of India’s beer market, has decided to shut its Ludhiana brewery in Punjab from 30 June 2026. The company has entered into a long-term capacity leasing arrangement with a contract brewing facility to ensure continued supply across Punjab, Delhi and adjoining markets.
Earlier this month, the Kingfisher and Heineken-backed brewer indicated it may scale back operations in regions where returns remain unviable, as sharp input cost inflation and rigid state pricing regimes force difficult choices between expansion and profitability.
The company has also signalled that it will take hard decisions in states where structural profitability remains weak, including the possibility of reducing supply, trimming promotional spends, or deprioritising certain markets.
“We are not going to do charity,” Vivek Gupta, MD at UBL told investors. “I am not going to hesitate to take tough calls, where in the states the structural profitability is not there because of regulators. This is a time when the industry is in crisis, costs are going down.”
Adding to industry-wide strain, geopolitical disruptions in West Asia are expected by executives to keep input costs elevated in the coming months. In some markets, UBL has already reduced trade spending to zero where margins have become unsustainable and has suggested it may not match aggressive discounting by competitors in similar regions.
The Brewers Association of India has warned that cost inflation is widespread across the value chain, citing sharp increases in key inputs: glass bottle prices have risen about 20 per cent, paper cartons have nearly doubled, while plastics and adhesives are up 20–25 per cent. Freight costs have climbed 10 per cent, and a weaker rupee has further increased import-related expenses.
