India's Beverage Supply Crunch: Coke, Kingfisher Scramble for Imported Cans
Overview
Beverage giants, including Coca-Cola and Kingfisher, are sharply increasing imports of aluminum cans from West Asia and Sri Lanka to meet surging summer demand. Delays in Bureau of Indian Standards (BIS) certification for can manufacturers are choking local supply, forcing companies to double import orders and avoid a repeat of last year's shortages. Industry bodies are lobbying for a one-year postponement of these certification requirements.
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Summer Demand Meets Supply Bottleneck
India's leading beverage and beer makers, including Coca-Cola, Kingfisher, and PepsiCo, are urgently increasing imports of aluminum cans to navigate an impending summer shortage. Surging consumer demand coupled with delays in mandatory Bureau of Indian Standards (BIS) certification for local and foreign suppliers has choked domestic production.
As the peak summer season approaches, companies like United Breweries, AB InBev, and Carlsberg are doubling their import orders for cans from sources in West Asia and Sri Lanka. Beer manufacturers are also seeking imports from Germany, Thailand, Poland, and Indonesia to secure supply. This proactive measure aims to prevent a repeat of last year's critical imbalances and ensure growth isn't stymied.
BIS Certification Delays Create Bottleneck
The core issue lies with the mandatory BIS certification, introduced via a Quality Control Order (QCO) in April last year. The process requires can makers, both domestic and international, to meet stringent technical standards covering material composition, lids, and coating adherence.
Industry executives report that the certification procedures are excessively prolonged, often including the inspection of overseas manufacturing plants. This leads to significant delays, preventing local suppliers from meeting demand.
Industry Seeks Regulatory Relief
To bridge the immediate supply gap, the Brewers Association of India (BAI) is actively engaging with the Department for Promotion of Industry and Internal Trade (DPIIT). BAI is requesting an extension of the BIS certification deadline for imported cans by one year or interim exemptions for pending import applications.
They emphasize that building new domestic capacity and obtaining foreign certifications are time-consuming processes crucial for meeting production timelines, ideally by the end of February for summer sales.
Rising Demand for Cans
The demand for aluminum beverage cans has seen a dramatic surge, now accounting for over 25% of annual soft drinks and beer sales, doubling in the last two years. Industry leaders attribute this rise to the cans' perceived aspirational quality, convenience over glass or PET bottles, and superior recyclability.
Coca-Cola, PepsiCo, and Reliance Consumer have recently launched smaller, more affordable can formats starting at Rs 10, further driving consumption.
Domestic Capacity Strain
Leading can manufacturers, such as Ball Beverage Packing and Canpack, report that their domestic capacity is fully utilized. Adding new production lines could take up to a year, leaving a significant gap that imports must fill. Last year, beer makers faced a deficit of 120-130 million units of 500 ml cans, potentially costing state exchequers ₹1,300 crore in lost revenue. Projections indicate India's total aluminum beverage can market could reach $800 million by 2032, from $400 million last year, with the beverage segment growing 8.5% between 2019 and 2023. United Breweries previously warned that can shortages could curb revenue by 1-2%.
