Diageo’s India arm United Spirits has challenged a regulatory order restricting the sale of its , arguing that the action was imposed without proper legal process. The company has also questioned the timing of the food safety regulator’s subsequent consultation on the labelling rules at the centre of the dispute, according to documents reviewed by Reuters.
The case comes amid a broader crackdown on alcoholic beverages in India, where regulators have restricted several whisky and rum brands produced by Diageo and Inbrew over alleged mislabelling and the use of artificial flavours. The action has unsettled an industry valued at about $40 billion, Reuters reported.
United Spirits challenges rum prohibition order
United Spirits has argued before the court that the food safety officer responsible for the Maharashtra order did not have the statutory authority to prohibit the product.
The company also alleges that the officer circumvented the adjudicatory process by relying on a food analyst’s report to impose a stop-sale order.
The legal challenge had previously been disclosed by Diageo to Indian stock exchanges. However, the August 1 filing provides more detail on the company’s case against the restrictions affecting its Maharashtra-made rum, which Diageo describes publicly as one of its leading products.
FSSAI consultation becomes central to dispute
The company has also focused on the timing of the Food Safety and Standards Authority of India’s actions.
United Spirits said FSSAI began consulting alcohol industry participants on regulatory questions surrounding flavour labelling only days after the prohibition order was issued.
Diageo argued that keeping the restriction in place while the regulator was still examining the relevant rules was unwarranted.
“The continued operation of the prohibition order, while the issues remained under active consideration by the FSSAI itself, was premature, disproportionate and commercially prejudicial,” Diageo said in its August 1 court filing, seen by Reuters on Tuesday.
What FSSAI says about McDowell’s rum label
The dispute centres partly on the wording used on the bottle.
The ingredients listed on state that it contains artificial flavour (rum). FSSAI, however, took a different view of what constitutes an appropriate rum flavour under the relevant rules.
The regulator’s prohibition order, included in court documents, states that “flavor of rum should be characteristic based on the natural ingredients, fermentation processes, and maturation techniques”.
The disagreement has placed the labelling and composition of alcoholic beverages under renewed scrutiny, particularly as regulators examine how flavouring should be described and classified.
Mumbai High Court seeks Centre’s response
The case reached the on Monday (10 August), according to online court records.
The court did not provide United Spirits with immediate relief and directed the federal government to respond to the challenge by August 19.
The proceedings could determine whether the Maharashtra food safety authorities acted within their legal powers and whether the prohibition order followed the required adjudicatory procedure.
Diageo faces wider regulatory scrutiny in India
The rum dispute is unfolding alongside separate regulatory action involving Diageo’s liquor packaging.
Indian inspectors last week seized around 18,000 boxes of Diageo liquor bottles over allegations that the containers lacked markings indicating that they had been made using safe recycled plastic, Reuters reported on Monday.
The development adds to the scrutiny facing Diageo in one of its most important markets.
Diageo has described India as its “consumer market of the decade” and has maintained that it complies with applicable laws.