Why in news ?
- Alcobev industry shifting toward PET and aseptic packaging due to glass price volatility, furnace shutdowns, and supply disruptions.
- Supreme Court objected to pocket-sized liquor packs, calling them deceptive and dangerous.
Relevance
- GS 3: Economy (industrial supply chains, cost pressures, market shifts)
- GS 3: Environment (recyclability, waste management, circular economy)
- GS 3: Science & Tech (packaging materials, rPET technology)
Packaging types
- Glass:
- Premium image, inert, recyclable.
- High cost, breakage risk, volatile supply.
- PET:
- Lower cost, lightweight, easier logistics.
- Environmental concerns; weaker premium perception.
- Aseptic / multilayered board packs:
- Used in low-end segments; harder to counterfeit.
- Under Supreme Court scrutiny for safety/deception concerns.
- rPET:
- Recycled PET; costlier than virgin PET currently.
- Improves supply stability; strengthens circular economy.
Market context
- Mass-market in Karnataka uses ~80% multilayered board due to dominance of low-end segments.
- UP and Karnataka widely use aseptic packs; Kerala, AP, Maharashtra, Telangana use PET.
- Some states lack excise provisions for formats like rPET.
Economic drivers
- Glass pricing volatility:
- Furnace shutdowns → cross-regional sourcing → higher freight (e.g., United Spirits).
- Capacity > demand (e.g., Radico Khaitan) but utilisation remains uneven.
- Prices stable now but historically unpredictable → margin risks.
- Cost pressures:
- Rising packaging costs push companies toward alternatives.
- PET lowers logistics cost and breakage losses.
- rPET offers long-term stability but not yet margin-improving.
Industry adjustments
- Long-term vendor contracts and alternative sourcing to manage inflationary pressures.
- Migration to PET for low-end brands to preserve wafer-thin margins.
- Premium and mid-segment brands retain glass for brand positioning and consumer preference.
Regulatory angle
- Supreme Court concern: Pocket-sized liquor packs resemble juice boxes → misleading and unsafe.
- Anti-counterfeit considerations: Multilayered packs reduce revenue leakages.
- State-level divergence on PET acceptance due to environmental considerations.
Environmental perspectives
- Glass: Infinitely recyclable but suffers from poor collection and reprocessing in India.
- PET/rPET: Lower transport emissions; potential circularity; pollution risks persist.
- rPET expected to become cost-competitive as ecosystem scales.
Structural vs cyclical changes
- Packaging shift considered structural, not tied to temporary glass price volatility.
- Drivers: Supply stability, logistics optimisation, anti-counterfeit needs, and predictable long-term costs.
