Diageo to Reformulate Popular Whiskies and Rum After Flavoring Crackdown

Diageo has agreed to reformulate some of its biggest-selling whisky and rum brands in India after the country’s food safety regulator banned several products over alleged violations involving added flavorings, Reuters reported Monday.

Two Indian government sources told Reuters that Diageo has agreed to change the formulas for the affected spirits, while the regulator is expected to lift the bans based on that agreement. The sources spoke on condition of anonymity because the decision has not been made public.

The development follows a regulatory crackdown earlier this month that affected several Diageo brands as well as spirits made by other Indian companies.

The whisky products affected by the initial bans included Diageo’s Royal Challenge and Antiquity Blue whiskies in Madhya Pradesh. Its McDowell’s No. 1 Celebration Matured XXX Rum was also banned in Maharashtra.

Diageo has agreed to stop adding whisky flavoring to whisky and rum flavoring to rum as part of the reformulation, per Reuters.

The changes will apply to the affected brands produced anywhere in India, rather than only products made in states where regulators previously restricted their sale, according to one of the sources.

The issue centers on India’s rules governing the use and labeling of flavoring substances in alcoholic beverages. Earlier this month, Indian regulators alleged that some spirits were improperly flavored or mislabeled. Diageo has previously said that its products comply with applicable laws.

Royal Challenge is among Diageo’s major products in India. The company says more than 4.5 million nine-liter cases of the whisky are sold annually in the country, placing it in what Diageo calls the “mid prestige” price segment.

The product’s labeling states that it is a blend of Indian grain spirit and imported Scotch whiskies matured in American oak casks. Its ingredient information also identifies added nature-identical whisky flavoring substances.

While the reformulation process is underway, Diageo has agreed to make the added flavoring clearer on the front of the affected products, according to Reuters.

The regulatory scrutiny comes as Diageo continues to view India as one of its most important growth markets. The company has previously described the country as its “consumer market of the decade.”

The company is now facing additional scrutiny beyond the flavoring issue.

Indian inspectors reportedly recently seized about 18,000 boxes of Diageo liquor bottles over alleged failures to include markings indicating that the bottles were made with safe recycled plastic.