The Aftermath of the War with Iran: A Surprising Shortage in India

The war between the USA and Iran continues to cause shocks in global supply chains, reaching one of the world's largest consumer markets. After the conflict led to a severe shortage of aluminum cans, which gave rise to an unusual wave of "Diet Coke parties" across India, the popular drink is now becoming significantly more expensive.

Coca-Cola has raised the prices of Diet Coke in India—sold primarily in aluminum cans—by more than 10%. The price hike is due to the crisis in the Middle East, which has choked supply chains and forced the company to source larger, more expensive cans from Southeast Asia, two sources told Reuters.

The Strait of Hormuz, a critical supply route for aluminum and raw materials arriving in India, has effectively closed again due to severe disruptions in commercial traffic following the collapse of the temporary truce intended to de-escalate the conflict with Iran. There are now fears that these disruptions could expand to the blocking of other sea routes.

Unlike most global markets, Diet Coke in India is sold mainly in cans, making it particularly vulnerable to these disruptions. The most popular version was previously a 300 ml can priced at 40 Indian rupees. Following the shortage, Coca-Cola began marketing 330 ml cans at 50 rupees to pass the higher costs on to consumers. Calculated per milliliter, this represents a price increase of 13.6%.

The company, which did not publicly announce the price changes, did not respond to multiple inquiries on the matter. Meanwhile, at least one Indian bottling franchisee began offering Diet Coke in limited-edition 200 ml glass bottles, though these are significantly more expensive than the canned version.

India is considered a key growth market for Coca-Cola and Pepsi. Unlike Diet Coke, most of the companies' other beverages are sold in plastic and glass bottles as well. Diet Coke has become particularly popular among health-conscious consumers. The company also sells Coca-Cola Zero in India, but its supply is not at risk as it is also available in plastic bottles.

The shortage that has emerged in recent months has even created a cultural phenomenon: pubs and social media influencers in India identified a business opportunity and began organizing "Diet Coke parties," charging an entrance fee of 10 to 16 dollars and offering participants access to the rare drink alongside music and alcohol.