NEW DELHI — Diageo, a global spirits giant, is challenging an Indian government prohibition on its popular McDowell’s No. 1 Celebration Matured XXX Rum, arguing in court that the ban was imposed without due process and at a time when the food safety regulator was actively consulting on the very labeling rules at the heart of the dispute. This development comes as India’s food safety regulator has initiated its most significant crackdown in years, banning several whisky and rum brands from Diageo and India’s Inbrew in various states, citing mislabeling and the improper use of artificial flavors.
While Diageo had previously informed Indian stock exchanges of its court challenge, a non-public court filing, seen by Reuters, now provides detailed arguments against the restrictions placed on the rum produced in Maharashtra. Diageo publicly identifies this product as one of its top sellers.
In the court filing, Diageo India’s unit, United Spirits, contended that the food safety officer who issued the prohibition lacked the legal authority to do so and bypassed the standard adjudicatory process by using a food analyst’s report to enforce the stop-sale order. Furthermore, Diageo pointed out that the Food Safety and Standards Authority of India (FSSAI) began consulting the industry on regulatory aspects of flavor labeling only days after the prohibition order was issued.
“The continued operation of the prohibition order, while the issues remained under active consideration by the FSSAI itself, was premature, disproportionate and commercially prejudicial,” Diageo stated in its August 1 court filing.
Both the FSSAI and Diageo have yet to respond to queries from Reuters. However, a government source, disagreeing with Diageo’s stance, told Reuters that the FSSAI was discussing the matter with the industry solely at the request of alcohol companies.
Online court records indicate that the challenge was briefly heard on Monday in Mumbai’s High Court. The judge did not grant immediate relief and has requested the federal government to respond by August 19.
The core of the FSSAI’s argument, as outlined in court papers, stems from the McDowell’s bottle’s ingredient list, which specifies “artificial flavour (rum).” The regulator’s prohibition order asserts that “flavor of rum should be characteristic based on the natural ingredients, fermentation processes, and maturation techniques.”
This scrutiny of Diageo’s products is not isolated. Last week, Indian inspectors seized approximately 18,000 boxes of Diageo liquor bottles, alleging a lack of markings indicating their production using safe recycled plastic. This incident, reported by Reuters on Monday, broadens the regulatory focus on the company.
Diageo, which has termed India its “consumer market of the decade,” has consistently maintained its compliance with Indian law.
