Indian Whisky - Trade Controversy

Trade Controversy

The consumption of native distilled molasses-based whisky in India is encouraged by tariff barriers of up to 550% that impose a significant markup on imported whiskies in India. Imported Scotch whisky bottled under its own brand names makes up only 1% of the total market share. The substantial tax markup on imported whiskies has been categorized by the Scotch Whisky Association as "pure protectionism". There have been some efforts to try to reduce the tariff on Scotch whisky to 150%.

Under Vijay Mallya's direction, United Breweries has been acquiring a number of noted whisky brands and distilleries in Scotland, including Dalmore, Isle of Jura, and Whyte & Mackay. United Breweries has been increasing production at its Scottish facilities, and has moved to double the production of whisky at Invergordon. Some of the Scotch whisky so produced is used to blend with the Indian molasses whisky.

Indian distillers, by contrast, accuse the European Union of erecting its own sort of trade barriers by means of rules that forbid the marketing of molasses-based spirits as "whisky". Mallya has objected to the EU's refusal of entry to molasses-based whiskies, claiming that the "imposition of British imperialism is unacceptable". In a lawsuit brought in India by the Scotch Whisky Association, the Delhi High Court enjoined Indian whisky manufacturers from labelling their product with the words "Scot" or "Scotch".