Diageo unit: India skipped due process in rum ban

Diageo's India unit, United Spirits, has challenged a ban on its popular rum, McDowell's No. 1 Celebration Matured XXX Rum, in Maharashtra's court. The company argues that the government did not follow due process in implementing the prohibition without first considering the labelling issues, which it claims were being actively investigated by the Food Safety and Standards Authority of India (FSSAI).

The dispute stems from the product's label, which claims the rum contains artificial flavor, while FSSAI maintains that the authentic flavor should be derived from the natural ingredients, fermentation processes, and maturation techniques. United Spirits questions the timing of the regulatory action, citing that FSSAI began consultations with the industry on flavour labelling only days after the prohibition order was issued.

The case is unfolding amid a broader regulatory crackdown on India's alcoholic beverages industry, which is worth approximately $40 billion. FSSAI has banned other whisky and rum brands from the same companies due to alleged mislabelling and improper addition of artificial flavors. The Bombay High Court recently heard United Spirits' challenge, but has not yet granted immediate relief and has requested the government's response by August 19.