India Bans Popular Diageo Whiskies and Rum Over Artificial Flavoring Concerns

In this June 14, 2005 file photo, Vijay Mallya, Chairman UB Group and Shaw Wallace, poses in front of a poster showing different liquor brands of his company’s spirits business United Spirits Ltd., at a press conference in Mumbai, India. (AP Photo/Aijaz Rahi, File)

India’s food safety regulator has barred the sale of several popular whiskies and rums made by Diageo’s Indian subsidiary and Inbrew Beverages after testing found artificial or “nature identical” flavoring substances in the products.

The Food Safety and Standards Authority of India said its tests found that some manufacturers were adding flavors associated with the alcoholic beverages themselves, such as rum flavor to rum or whisky flavor to whisky, rather than relying on natural ingredients or traditional maturation processes.

“There is no internationally recognized manufacturing practice whereby rum flavour is added to rum or whisky flavour is added to whisky,” the regulator said, according to Reuters.

The action affects several major brands in India’s roughly $40 billion alcohol market, including Diageo products Antiquity Blue Whisky, Royal Challenge Whisky and McDowell’s No. 1 Rum. FSSAI also ordered sales to stop for Inbrew’s Bagpiper Deluxe Whisky and Old Cask Deluxe XXX Rum, as well as three variants of Old Monk, one of India’s best-known rum brands.

According to Reuters, the products subject to the orders are locally produced spirits positioned at more affordable price points than imported whisky and rum.

FSSAI said it permits natural flavoring substances in alcoholic beverages but determined that the products under investigation contained external artificial or “nature identical” flavors. The regulator classified the products as “sub-standard” because of those findings.

The agency said the use of such flavorings could allow manufacturers to bypass maturation or the use of natural ingredients such as molasses, malt or grapes.

Diageo’s Indian subsidiary, United Spirits, is challenging the action. In a stock exchange filing, the company said the labels on the affected products comply with current laws and regulations and described the issue as “an industry wide concern.”

United Spirits has already filed a court challenge against FSSAI’s order concerning McDowell’s No. 1 Rum. A source with direct knowledge of the matter told Reuters that Diageo is also likely to separately challenge the orders affecting its whisky products.

Two senior industry executives said they believed the use of the flavorings complied with Indian regulations, according to Reuters.

It remains unclear whether the orders apply to the same brands produced at other facilities or are limited to products made at specific factories or sold in certain states. FSSAI did not respond to Reuters’ questions on the scope of the bans.

Royal Challenge is among Diageo’s most popular whisky brands in India. The company says more than 4.5 million nine-liter cases are sold annually.

The brand’s labeling, reviewed by Reuters, lists water, grain neutral spirit and Scotch alongside permitted natural coloring and “nature identical [whisky] flavouring substances.”

In Uttar Pradesh, a 375-milliliter bottle of Royal Challenge sells for 360 Indian rupees, or approximately $3.78, according to Reuters.

The regulatory action comes as FSSAI increases scrutiny of India’s food and beverage industry. The agency recently ordered manufacturers of high-caffeine beverages marketed as “energy drinks” to stop using that description, despite objections from major companies including Pepsi and Red Bull.