No cans, no cheers this festive season? Beer industry flags 13-crore shortage of 500 ml cans, urges import relaxations

The Indian beer industry has approached the Centre seeking a “short-term regulatory relaxation” in quality control order (QCO) rules for import of beer cans into the country, as it faces a severe shortage of 500 ml aluminium units, according to a PTI report.

The Brewers Association of India (BAI) in a letter to the Department for Promotion of Industry and Internal Trade (DPIIT) said that it is facing a deficit of 12-13 crore 500 ml units, which comprise around 20 per cent of total beer sales in the country.

BAI represents leading beer manufacturers AB InBev, Carlsberg, and United Breweries, which together account for 85 per cent of beer sold in India. It also said that the situation may lead to ₹1,300 crore shortfall in government revenues.

Why is there a shortage of aluminium cans?

Since April this year, aluminium cans require mandatory certification of the Bureau of Indian Standards (BIS), which has caused a short-term supply gap for the beer and wider beverage industry in India.

Usual suppliers, Can-Pack India and BALL Beverage Packaging India, have exhausted their domestic supplies and alerted of supply shortage for the next six to 12 months, at least, as per the report.

Due to the mandatory BIS certification, import of can from abroad could also be delayed by months, creating a likely disruption for the beer industry, as per the association.

Besides the low domestic supply, due to the QCO, the beer industry cannot import cans from foreign vendors without BIS certification,and even once sourced, the process could take several months.

What remedy is the beer industry seeking?

• BAI in its letter sought deferment of the QCO which mandates BIS certification for imported aluminium cans till April 2026, “to provide sufficient time for domestic suppliers to build local manufacturing capacity”.
• Earlier, the government had extended the requirement till September 30, which the association said was “not sufficient” to build local manufacturing capacity or import enough cans into the country.
• BAI has also requested “to allow import of cans without BIS certification by international suppliers who have submitted their BIS certification application along with required documentation until the time their applications are processed”.
• “This transitional arrangement will avoid business disruption while upholding regulatory oversight,” said BAI Director General Vinod Giri in the letter.
• As per the letter, the beer industry in India comprises 55 breweries, which have about ₹25,000 crore of investment and employ over 27,000 people. Besides this, it said, the industry “creates an economic impact through farmers, ancillary units, and is facing short-term supply problems”.
• “However, this expansion is expected to take at least 12 months, and the recently granted one-month extension, although welcome, is not sufficient to build local capacity NOR import cans from other countries to meet the shortfall,” it added.
• The letter added that shortage of aluminium cans is only one challenge and revenues, including to state excise departments, VAT and GST, could also take a hit. “We estimate that the combined loss to central and state governments could range between ₹1,200-1,300 crore annually,” it said.
• BAI also highlighted a “broader economic impact with operational impacts across allied industries such as agriculture, packaging, logistics, and retail”.

(With inputs from PTI)