Diageo to Reformulate Popular Whisky and Rum Brands in India Following Regulatory Crackdown
NEW DELHI, India – August 17, 2023 – Global spirits giant Diageo has agreed to reformulate several of its top-selling whisky and rum products in India, sources close to the matter have revealed. This significant decision comes after India’s food safety regulator implemented a ban on these brands in certain states, citing breaches in regulations concerning the addition of flavors and potential mislabeling.
The Food Safety and Standards Authority of India (FSSAI) is expected to lift its ban on this understanding, marking a crucial resolution in one of the world’s largest and most dynamic spirits markets. Diageo’s India unit, United Spirits, and the FSSAI have yet to issue official statements regarding the agreement.
This development follows what has been described as India’s most extensive food safety crackdown in years. Earlier this month, the FSSAI sent shockwaves through the nation’s colossal $40 billion spirits industry by prohibiting several whisky and rum brands, including those from Diageo and other Indian companies. The core of the regulatory concern revolved around alleged mislabeling and the improper inclusion of flavorings – specifically, the addition of "whisky flavor in whisky" and "rum flavor in rum."
Diageo, which has previously lauded India as its "consumer market of the decade," had initially maintained compliance with existing laws. However, the regulatory pressure, impacting hugely popular products like Antiquity Blue and Royal Challenge whisky manufactured in Madhya Pradesh, and McDowell’s No. 1 Celebration Matured XXX Rum produced in Maharashtra, appears to have prompted a shift in strategy.
Government sources, who requested anonymity due to the private nature of the discussions, confirmed that Diageo has committed to ceasing the practice of adding flavorings that mimic the spirits themselves. This means an end to the inclusion of "whisky flavour in whisky" and "rum flavour in rum."
These reformulation requirements will extend to these brands produced across all of India, not solely confined to the states where the initial restrictions were imposed. This broad application underscores the FSSAI’s intent to standardize product formulations nationwide.
Royal Challenge, a domestically produced whisky, stands as one of Diageo’s most significant revenue generators in India. The company reports annual sales exceeding 4.5 million nine-liter cases for Royal Challenge, categorizing it within the "mid prestige price segment." The product’s front label currently declares it a "rich blend of Indian grain spirit & imported scotches, matured in American oak casks." However, the back label, which lists "demineralised water, grain neutral spirit, Scotch. Contains permitted natural colour … and added nature identical (whisky) flavouring substances," appears to be at the heart of the regulatory dispute.
During the transitional period while Diageo implements these reformulations, the company has also agreed to introduce clearer front-of-pack labeling. This temporary measure will explicitly communicate to consumers the nature of any flavorings that have been added to the spirits.
This regulatory scrutiny extends beyond flavorings. Separately, Indian inspectors recently seized approximately 18,000 boxes of Diageo liquor bottles. These seizures were reportedly due to the alleged absence of markings verifying their manufacture using safe recycled plastic, highlighting a multi-faceted approach by Indian authorities to ensure product safety and compliance.
(Reporting by Aditya Kalra; Editing by Susan Fenton)
