business

Updated: May 12, 2014 00:52 IST

Legal action has been launched against companies who import “extremely worrying” quantities of Indian whisky in the European Union, which is then mixed and sold as inexpensive “blended whisky”.

The Scotch Whisky Association (SWA) said it became aware of large quantities of Indian whisky being imported in the EU since 2009. It has raised the issue with the EU Commission and enforcement authorities in France, Spain, Belgium and The Netherlands.

“Over a period of 4 years the association traced the import of 4.5 million litres of Indian ‘whisky’ which, if mixed with genuine whisky to produce these ‘blended whiskies’, could have produced 25 million bottles”, SWA said in its annual review released on Friday.

The sale of such “blended whiskies” amounted to “unfair competition against genuine whisky producers”, it said.

The EU definition of whisky requires it to be distilled from cereals, below 94.8% volume so that it retains the flavour of raw materials, and to be matured for at least 3 years in wooden casks.

SWA said that “Indian voluntary standard does not require whisky to be distilled from cereals or to be matured. Very little Indian ‘whisky’ qualifies as whisky in the EU owing to the use of molasses or neutral alcohol, limited maturation and flavourings. Such spirits are considerably cheaper to produce”.

The review noted that the Indian liquor industry has sought a cut in import tariff from 150% to 75% and then progressively reduced to 30% over five years.

The SWA has been lobbying for alcohol to be included in India’s proposed Goods and Services Tax (GST) regime. The review said progress had been made and that there was a “good chance that alcohol will at least not be excluded from the ambit of the GST”.