Diageo Plc’s Indian subsidiary United Spirits Ltd. has approached the Bombay High Court seeking to quash a Maharashtra government order that prohibits the sale of McDowell’s No. 1 Celebration Matured XXX Rum, arguing that the action was taken without legal authority and in violation of due process. The company has described the ban as premature, stating that the Food Safety and Standards Authority of India (FSSAI) began consulting the alcoholic beverages industry on flavor-labeling standards only after the prohibition order had already been issued.
The dispute centres on the product’s label, which mentions “artificial flavour (rum)”. FSSAI has reportedly taken the view that the characteristic flavour of rum should arise naturally from ingredients, fermentation and maturation processes rather than from added flavouring substances. United Spirits has argued before the court that a Maharashtra food safety officer relied on a laboratory report to impose a stop-sale order without following the adjudication procedure prescribed under the law and without possessing the statutory power to issue such a prohibition.
In its petition filed on August 1, United Spirits told the court that continuing the ban while FSSAI itself was reviewing and consulting stakeholders on the applicable labeling standards was “premature, disproportionate and commercially prejudicial.” The Bombay High Court has not granted immediate relief and has directed the Central government to file its response by August 19, with the next hearing scheduled for August 24.
The case has emerged as a significant test for India’s approximately $40 billion alcoholic beverages industry, which is facing increasing regulatory scrutiny over artificial flavouring, maturation claims and labeling practices. The controversy has also been accompanied by other enforcement actions involving Diageo brands, including the recent seizure of around 18,000 boxes of liquor bottles in Bengaluru over allegations that the bottles did not carry the required recycled-plastic markings.
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The matter has been clubbed with a separate petition filed by Mohan Rocky Springwater Breweries Pvt. Ltd., the maker of Old Monk Rum. The company informed the Bombay High Court that the restrictions are causing losses of nearly Rs 1 crore per day. Senior advocate Navroz H. Seervai, appearing for the company, argued that Old Monk has been sold for more than 50 years under the prevailing regulatory framework and that there have been no consumer complaints or reported health issues linked to the affected products.
Mohan Rocky Springwater Breweries has further argued that changing its labels in line with FSSAI’s suggested interpretation would effectively amount to acknowledging that the product had been incorrectly marketed for decades. By hearing both petitions together, the Bombay High Court has indicated that the cases raise broader questions regarding the scope of food safety regulation, labeling standards and the extent of state-level enforcement powers over nationally distributed liquor brands in India.
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