SLMG Beverages may raise prices as packaging costs surge amid Middle East conflict
SLMG Beverages faces rising packaging costs linked to geopolitical tensions, with potential price hikes under review as competition intensifies in India’s fast-growing soft drinks market.
INDIA – SLMG Beverages, Coca-Cola’s largest bottler in India, may raise product prices as escalating packaging costs linked to the ongoing conflict in the Middle East put pressure on margins.
The war has driven up costs for key packaging materials, including plastic bottles, caps, labels and cardboard boxes, with some packaged water manufacturers already increasing prices.
Deputy chief executive officer Rahul Kumar said the company is closely monitoring the situation and may adjust pricing if cost pressures persist.
“If the war continues, the packaging material cost may continue to move up,” Kumar said, adding that any decision to raise prices would depend on competitor actions and consumer response.
He noted that the highly competitive nature of India’s soft drink market limits the scope for price increases. “There is limited room to raise prices in the highly competitive soda market,” Kumar said, adding that the company has not implemented a portfolio-wide price increase in the past seven to eight years.
He said SLMG will review pricing in April.
The cost pressures come as competition intensifies following the re-entry of the Campa cola brand by Reliance Industries in 2023, which has sparked a price war by leveraging its extensive retail network and appealing to nationalist sentiment.
Despite these challenges, Kumar said competition is expected to drive growth in the sector by attracting new consumers. According to Redseer Strategy Consultants, India’s non-alcoholic ready-to-drink beverage market could double to approximately US$40 billion by 2030.
To capitalise on this growth, SLMG, which accounts for more than 22% of Coca-Cola’s India volumes, plans to invest between Rs 1,000 crore and Rs 1,200 crore in each of four new manufacturing plants over the next five years.
The company has reported strong financial performance, with sales rising 49% to Rs 6,773 crore in the 2025 fiscal year and net profit increasing 76% to Rs 206 crore, according to data from Tofler.
Revenue also surpassed Rs 8,000 crore, supported by steady demand across beverage categories.
SLMG is targeting net revenue of Rs 10,000 crore by 2026–27 as it expands in populous states such as Bihar and Uttar Pradesh, where rising incomes and low consumption levels present growth opportunities.
Earlier this month, the company inaugurated a greenfield manufacturing facility in Nawanagar, Buxar, Bihar, with an investment of Rs 1,200 crore, aimed at strengthening production capacity in eastern India.
Sign up HERE to receive our email newsletters with the latest news and insights from Africa and around the world, and follow us on our WhatsApp channel for updates.
