CIABC worried over massive scotch whisky import from UK

The Confederation of Indian Alcoholic Beverage Companies (CIABC) has raised serious concerns over the massive growth in the import of Scotch whisky from the UK.

“As per the Scotch Whisky Association, India has become the largest export market globally for Scotch whisky. This is also supported by the Government of India import data which shows that the import of Scotch whisky grew by 148 per cent in the period April to September 2022 over the same period the previous year. During this period the domestic industry grew by just a little over 20 per cent. These facts simply disprove the claim made by some SWA members that the Scotch whisky is being denied fair opportunity in India,” said Vinod Giri, Director General of CIABC.

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CIABC also said that it is a misrepresentation to claim that Scotch whisky accounts for only 2 per cent of the Indian whisky market. As per the CIABC, most of the Indian whisky segment is very low-value and commercially unsustainable. It is pointless to calculate market share on that base since that segment is extremely low in value and is not accessible by Scotch whisky producers under any circumstances.

According to CIABC, the commercially viable whisky market in India consists of Rs 500 per bottle (750 ml) and above (reference Delhi). This is the market accessible to the Scotch whisky makers and major Indian companies and should form the basis of market share calculation.

CIABC contends that the growth in Scotch whisky is taking place also because of some State Governments giving special reductions to imported Scotch whiskies in an attempt to ‘offset’ the customs duty. The State of Maharashtra, one of the largest markets for imported products, last year reduced Duty on imported liquor from 300 per cent to 150 per cent. This led to a surge in imported liquor and a drop of more than 50 per cent in sales of premium Indian whiskies such as Amrut.

Commenting on the Scotch whisky export data, the CIABC Director General added, “the fact that Scotch whisky, which has a strong presence in the commercially viable segments of the Indian market, is growing many times faster than the domestic whisky industry even in absence of an FTA, puts in question the very need for an FTA. Customs duty concessions, coupled with a misplaced approach of supporting imported products by some state Governments, have the potential of edging the domestic industry out of the commercially viable segments and thus out of business. That would be catastrophic for domestic industry, state revenues, Indian farmers and Indian workforce."

"We appeal to the Government to tread carefully on the UK FTA and ensure minimal concessions are given and that too in a long-phased manner. We also wish to highlight the importance of having a Minimum Entry Price of $5 per bottle for a product to avail of concessions under the FTA. In absence of such safeguards, we might be bidding farewell to the domestic industry," he said.