The dispute reaches beyond one bottle: India’s unfinished flavor-labeling rules could determine whether a major international drinks company can resume sales.
Diageo’s Indian subsidiary, United Spirits, has challenged in court a ban on the sale of McDowell’s No. 1 Celebration Matured XXX Rum produced in Maharashtra. The company argues that the restrictions were imposed without due process and before discussions on flavouring labelling rules had concluded.
The ban was part of a broader inspection of India’s alcohol market. The regulator restricted the sale of several whisky and rum brands produced by Diageo and Indian company Inbrew over possible mislabelling and the use of artificial flavourings.
Diageo alleges procedural violations
In a court filing dated August 1, United Spirits said that the food safety official who issued the ban order allegedly lacked the legal authority to make such a decision. The company also stated that the order to halt sales was issued on the basis of a food analyst’s opinion, bypassing the prescribed case review procedure.
A few days after the restrictions were introduced, the Food Safety and Standards Authority of India (FSSAI) began consultations with industry representatives on regulating flavouring labels. Diageo stressed that this showed there were no finalised rules governing the issue that led to the ban.
The continued operation of the ban order while these issues remained under active consideration by the FSSAI itself was premature, disproportionate, and commercially damaging.
– United Spirits, court filing dated August 1
Court grants no immediate relief
The case was briefly heard by the Bombay High Court on August 11. The judge did not grant the request for the immediate lifting of the restrictions and ordered the federal government to submit its response by August 19.
The label on McDowell’s No. 1 Celebration Matured XXX Rum states that it contains an artificial rum flavouring. However, the FSSAI believes that the flavour of rum should be created through natural ingredients, fermentation processes, and the ageing of the beverage.
Scrutiny of Diageo in India expands
Separately, Indian inspectors last week seized around 18,000 cases containing bottles of Diageo alcohol. The reason was the alleged absence of labels confirming the use of safe recycled plastic.
Diageo describes India as one of its key consumer markets and says it complies with legal requirements. Court proceedings over the rum ban will continue after the federal government’s position is received.