The Bombay High Court is set to examine challenges to regulatory action taken by the Food Safety and Standards Authority of India (FSSAI) against certain alcoholic beverage products and consider whether the affected manufacturers can resume their sale while the dispute is pending.
The matter assumes significance for some of India’s leading liquor manufacturers after FSSAI prohibited the sale of specified whisky and rum products, citing alleged violations of food safety and labelling requirements concerning the use of artificial or “nature-identical” flavouring agents.
The regulatory action has affected products manufactured by companies including United Spirits and Inbrew Beverages. Among the products reportedly affected are variants of Antiquity Blue, Royal Challenge, McDowell’s No. 1, Bagpiper and Old Monk. The action, however, is directed at specific products or variants and does not constitute a blanket ban on the brands.
At the heart of the dispute is the use of flavouring substances in alcoholic beverages. FSSAI has questioned the use of artificial or nature-identical flavouring agents to replicate characteristics associated with traditionally matured spirits. The regulator’s position is that such products cannot be marketed in a manner that suggests they are conventional whisky or rum conforming to the applicable standards.
The dispute also raises questions regarding the classification and labelling of such products. One of the issues is whether spirits containing added flavouring should instead be sold as “flavoured” alcoholic beverages, and whether claims relating to the age or maturation of the products could potentially mislead consumers.
The affected manufacturers have challenged the regulatory action, asserting that their products and labels comply with the applicable legal requirements. United Spirits, part of Diageo’s Indian operations, has disputed FSSAI’s findings and approached the Bombay High Court.
The proceedings could require the High Court to examine the scope of FSSAI’s regulatory powers in relation to alcoholic beverages, the standards applicable to whisky and rum, and the circumstances in which the food regulator can restrict the manufacture or sale of a product.
An immediate issue before the Court is whether the affected manufacturers should be permitted to resume sales or dispose of existing stock while the larger dispute is adjudicated. Any interim relief could have significant commercial implications for the companies, particularly if sales are permitted subject to revised labelling or other compliance requirements.
The proceedings also raise a wider regulatory question concerning established practices in the alcoholic-beverages industry. The Court may have to consider whether longstanding industry practices can continue when the regulator subsequently determines that they do not conform to prescribed standards.
The outcome could therefore have implications extending beyond the individual products involved, particularly for manufacturers of spirits that use flavouring agents and for the regulatory framework governing their manufacture, classification, labelling and marketing in India.
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