West Asia conflict triggers aluminium can shortage for cola makers

The ongoing West Asia conflict has disrupted the supply chain for aluminium cans in India, forcing popular canned cola drinks to be missing from the shelves of neighbouring retail stores and on quick-commerce platforms in leading cities. Cola companies in India, such as Coca Cola and PepsiCo, are mainly dependent on the import of aluminium cans from West Asian countries, including the UAE, Bahrain and Qatar, and supply from the region has been disrupted, creating a shortage in India, said industry observers. While companies sell their cola drinks in PET bottles, mainly in India, in the wake of the supply chain constraints, popular products, such as Diet Coke, which are available in a can version in India, are now not available in many of the markets and quick-commerce platforms. Companies, especially Coca-Cola, depended on supply from CANPACK, which used to supply them from its West Asia-based facilities, which were impacted after the Iran-US war started. ''It is a unique problem because they were dependent completely on the Middle East,'' they said. This has forced consumers to look for alternatives, such as 'Coca-Cola Zero Sugar' and other healthy beverages. However, the brewing industry, which also widely uses aluminium cans for its beer, is comfortable on this front as around 80 per cent of the 500 ml cans, which they use, are manufactured domestically. For the rest, they are importing from outside. The beer industry has diversified sourcing of cans from countries like Thailand and Indonesia, among others. The non-alcoholic beverage industry generally uses 330 ml for soft drinks, while brewing companies use 500 ml packs. As the volume of beer companies is higher, leading manufacturers have set up facilities for them in India. This may force the beverage industry to increase the adoption of PET bottles. Sourcing of aluminium cans was always a challenge for both alcoholic and non-alcoholic beverage makers due to restrictions on imports due to mandatory quality control norms. However, in January, the government eased conditions by extending the implementation timeline for mandatory quality control norms for aluminium cans, used by cola makers, to the beer brewing industry. Despite that, domestic production of 500 ml cans could not be improved due to LPG shortage, leading to continued supply constraints in the market. However, as the gas supply to LPG lines is getting restored, the domestic manufacturers are gradually getting restored, they said. Industry observers also expect the domestic production of 500 ml cans to increase in the country as Hindalco, the leading producer of aluminium, has increased production of the special kind of sheet required for the production of cans.

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