By Aditya Kalra
NEW DELHI, Aug 3 (Reuters) – India’s food safety regulator has barred the sale of some popular whiskies and rum made by Diageo’s India unit and India’s Inbrew Beverages for using artificial flavouring instead of proper ageing and ingredients to achieve their taste and aroma.
India is one of the world’s biggest alcohol markets, with total annual sales estimated at $40 billion. Diageo is the nation’s biggest alcohol company by market share, with its popular brands competing with the likes of Pernod Ricard.
The locally made spirits subject to the regulator’s bans are more affordable than imported rum and whisky.
The Food Safety and Standards Authority of India (FSSAI) said it allows the use of natural flavouring substances in alcoholic drinks, but its tests found that some Diageo and Inbrew factories were adding flavours of the alcoholic beverage itself, like adding rum flavour to rum.
BYPASSING NATURAL PROCESSES AND FLAVOURINGS
“There is no internationally recognized manufacturing practice whereby rum flavour is added to rum or whisky flavour is added to whisky,” the FSSAI said in a statement late on Sunday.
Such flavours would allow companies to bypass maturation or the use of natural ingredients such as molasses, malt, or grapes, FSSAI added.
The FSSAI said it has ordered a ban on sales from Diageo’s Indian subsidiary, including popular brands such as Antiquity Blue Whisky and Royal Challenge Whisky, made in Madhya Pradesh state, and McDowell’s No 1 Rum made in western Maharashtra.
In a stock exchange filing referring to FSSAI’s concerns about its rum product, Diageo India unit United Spirits said it is taking up the matter with the FSSAI as “this is an industry wide concern”, adding: “the product labels in question are in compliance with the current applicable laws and regulations”.
It has also filed a court case challenging FSSAI’s order on its rum, Diageo added, without elaborating.
A source with direct knowledge of the matter said Diageo is also likely to separately challenge the directives on its whisky products.
OLD RUM BRANDS, POPULAR WHISKIES
The FSSAI also banned sales of Inbrew’s Bagpiper Deluxe Whisky and Old Cask Deluxe XXX Rum, produced in Madhya Pradesh, and sales of three popular variants of Old Monk – one of India’s best-known and oldest rum brands – made by Mohan Rocky Springwater in Maharashtra.
Inbrew and Mohan Rocky Springwater did not respond to requests for comment.
Royal Challenge Whisky is one of Diageo’s most popular products in India, described on its website as “a perfect fusion of scotch, Indian malts and grain spirits that’s been blended to perfection.” Over 4.5 million nine-litre cases of Royal Challenge are sold every year in India, Diageo says.
Alcohol pricing differs in each Indian state, but in Uttar Pradesh, a 375 millilitre bottle of the Royal Challenge whisky costs just 360 Indian rupees ($3.78).
A Reuters review of its product label said it contained water, grain neutral spirit, scotch with “permitted natural colour”, as well as “nature identical (whisky) flavouring substances”.
‘SUB-STANDARD’ PRODUCTS
The FSSAI tests found the products investigated were “sub-standard due to the presence of external artificial or nature identical flavours in the product”, the regulator said.
Two senior industry executives said the companies were concerned about the order, and they believed the addition of flavours was in line with Indian regulations. They declined to be named as the matter is sensitive.
It was not clear if the ban extended to the same brands being produced in the companies’ other factories, or only in a few states. The FSSAI did not respond to Reuters queries.
The FSSAI’s action comes as the regulator tightens scrutiny of the food and beverage sector.
It has ordered makers of high-caffeine beverages sold as “energy drinks” to stop using that description, rejecting efforts by the likes of Pepsi and Red Bull to stall the regulatory intervention, Reuters reported last week.
(Reporting by Aditya Kalra; Additional reporting by Saurabh Sharm; Editing by Jamie Freed, Kirsten Donovan)
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