United Breweries and Other Beverage Stocks to Watch Amid Aluminium Can Shortage in India

Synopsis: Beverage stock is in focus as the aluminium shortage in India disrupts the supply of soft drinks and beer, pushing costs higher by 25–30 percent and creating availability pressure during peak summer demand.

The beverage sector may come under near-term pressure due to an ongoing aluminium can shortage in India. The disruption is affecting supply of canned soft drinks, beer, and other packaged drinks, especially during the high-demand summer season, leading to constraints in product availability across key markets.

The shortage is being driven by aluminium supply disruptions, further worsened by geopolitical tensions and supply chain bottlenecks. Companies are increasingly relying on costlier imports and facing higher logistics expenses, which may add to margin pressure. Limited production capacity from key suppliers is also delaying recovery, keeping supply tight in the near term.

Stocks that could be affected: Alcohol Beverage stocks such as United Breweries, Som Distilleries & Breweries Ltd an could face near-term pressure due to the aluminium can shortage in India. 

Companies that sell non-alcoholic beverages in cans, like Varun Beverages and other similar firms, may face pressure due to a can shortage, which can disrupt production, raise packaging costs, and impact sales volumes and margins if supply constraints continue further ahead.

The supply disruption, driven by aluminium constraints, is affecting the availability of canned soft drinks and beer during peak summer demand. This may lead to higher input costs from imports and logistics, along with potential volume disruptions, especially for companies with higher dependence on canned beverage sales.

Factors that are driving the aluminium shortage

• War-driven supply disruption: The Iran conflict has disrupted aluminium supply chains, leading to a shortage of beverage cans in India. This has impacted soft drinks, beer, and other canned beverages. The disruption has intensified during peak summer demand, creating stress across the packaged beverage industry and limiting product availability in key markets.
• Diet Coke worst affected: Diet Coke is facing severe shortages across major cities, including Mumbai, Bengaluru, and Delhi-NCR. Since it is primarily sold in cans and has limited bottle alternatives, it is more exposed to supply disruptions. This has led to higher retail gaps and reduced availability in organized and quick-service channels.
• Beer and beverage segment hit: The shortage is not limited to soft drinks, as beer and other canned beverages are also facing supply constraints. Breweries and beverage companies are struggling to maintain consistent supply in retail and hospitality channels. This has disrupted seasonal demand patterns and affected overall sales momentum across categories.
• Rising import and logistics costs: To bridge supply gaps, companies are importing cans from markets such as the UAE and Sri Lanka at 25–30 percent higher costs. Additionally, freight and insurance expenses have risen by 12–15 percent, further increasing input cost pressures. This is squeezing margins across beverage manufacturers.
• Capacity constraints limiting recovery: Major suppliers like Ball Beverage Packaging are facing capacity limitations, restricting quick supply recovery. Setting up new manufacturing lines typically takes 10–12 months, delaying any near-term relief. As a result, the supply shortage is expected to persist, keeping pressure on beverage availability and pricing stability.

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