Middle East tensions & US tariffs drive aluminium costs up, Monster Beverage to counter with price hikes
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California-based beverage company Monster Beverage may raise its product prices incrementally through 2026 in a move to offset aluminium and freight costs due to the ongoing Middle East conflict. However, the company believes this move would not affect the consumption pattern of energy drinks, following their previous experience when the market remained resilient even after they increased prices.
Company executives said aluminium prices and freight expenses increased during the first quarter, partly due to tariffs and supply disruptions linked to geopolitical tensions in the Middle East. They added that further price increases may be considered if costs continue to rise.
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Guy Carling, CEO of EMEA and OSP at Monster Beverage Corp., said, “We continue to monitor the opportunity to take price. Modest inflationary pricing is working. The category is healthy, and we are gaining share in the category, and we are optimising the growth in consumer demand for our products.”
Americas CEO Rob Gering also said, “very pleased with the pricing actions we took in late 2025. We believe that play is working.”
Vice Chairman and CEO Hilton Schlosberg said tariffs and higher aluminium prices reduced gross margins during the quarter, though the impact remained below 1 per cent. He added that costs are expected to increase gradually through the remainder of the year.
The company linked higher aluminium costs to the 50 per cent tariffs imposed by the United States on aluminium imports and to a sharp rise in the Midwest aluminium premium. According to S&P Global, the premium in April 2026 was 186.5 per cent higher than a year earlier. It again increased by 17.9 per cent since February 28.
Monster also pointed to supply disruptions following military conflict involving Iran and disruptions in the Persian Gulf and Strait of Hormuz region, which affected aluminium shipments and tightened supplies. Industry concerns about a possible aluminium shortage have also increased in recent months.
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Schlosberg said the company is using “hedging strategies across the business where possible” to manage rising costs.
Higher freight costs also affected the business during the quarter, mainly because products had to be shipped outside normal distribution routes to meet stronger demand. Schlosberg said the company prioritised keeping products available and avoiding empty shelves.
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Despite rising costs, Monster executives said they remain confident in demand for energy drinks, describing the products as “an affordable luxury” compared with more expensive beverages such as coffee, which has also seen price increases.
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