India’s largest Coca-Cola bottler warns of price hikes as packaging costs surge 70% amid Middle East crisis

INDIA – SLMG Beverages, Coca-Cola’s largest bottler in India, has warned it may raise prices if rising packaging costs linked to the Middle East conflict become too difficult to absorb.

The conflict has driven up costs across the packaging value chain, from plastic bottles and caps to labels and corrugated boxes, with some bottled water producers already implementing increases.

Rahul Kumar, deputy CEO of SLMG, explained that if the war continues, packaging material costs may keep moving upward, adding that price increases would depend on competitors’ responses and consumer acceptance.

Packaging Cost Explosion by the Numbers

The numbers behind the squeeze are staggering. PET polymer prices surged 40 percent in just 12 days following the escalation.

The cost of material used in making plastic bottles has risen 50 percent to 170 rupees (US$1.81) per kilogram, while cap prices have more than doubled to 0.45 rupees (US$0.0048) apiece.

Corrugated boxes, labels, and adhesive tape are also costing significantly more.

Bisleri, India’s largest bottled water player, has already raised prices by 11 percent, a box of twelve 1-liter bottles now costs 240 rupees (US$2.57) compared to 216 rupees (US$2.32).

Angelo George, CEO of Bisleri, noted that packaging material costs have surged by over 70 percent in a fortnight.

Competitive Pressure Limits Pricing Power

The cost pressure comes at a challenging moment. Mukesh Ambani’s Reliance Industries revived the historic local cola brand Campa in 2023, igniting a price war.

Kumar noted that there is limited room to raise prices in the highly competitive soda market, adding that there has not been a portfolio-wide price increase in the past seven to eight years. SLMG will review prices again in April.

Growth Ambitions Amid Cost Pressure

Despite headwinds, SLMG is pressing forward. The company recorded net revenue of 67.73 billion rupees (US$722 million) in fiscal 2025, a 49 percent increase, and is targeting 100 billion rupees (US$1.07 billion) for 2026-27.

It plans to invest 10-12 billion rupees (US$106-128 million) in each of four new plants over five years.

The company holds nearly 50 percent market share in Uttar Pradesh and has achieved 100 percent Extended Producer Responsibility compliance while pioneering recycled PET for direct product contact.

What This Means for the Industry

The crisis underscores packaging supply chains’ vulnerability to geopolitical shocks.

With India’s non-alcoholic ready-to-drink beverages market projected to double to roughly US$40 billion by 2030, securing stable packaging supply has become a strategic imperative.

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