INDIA – The Confederation of Indian Alcoholic Beverage Companies (CIABC) is spearheading demands for significant reforms within the proposed free trade agreement (FTA) between India and the European Union (EU).  

The dispute centers on stringent EU regulations defining spirits, particularly challenging mandated maturation periods for whisky and brandy. This disagreement raises concerns about the future dynamics of the multi-billion-dollar alcohol trade between the two regions. 

Vinod Giri, Director General of CIABC, has highlighted what the industry terms “non-tariff barriers” imposed by the EU. Specifically, the mandatory three-year maturation for whisky and one year for brandy has been flagged as a point of disagreement.  

Giri argues that these requirements significantly escalate production costs for Indian manufacturers. He asserts that the warm Indian climate nullifies the necessity for such extended maturation, placing an undue burden on the industry.  

“We firmly believe that if the EU does not appeal the law pertaining to the maturation, any trade agreement will be one-sided, thus favouring only the EU and doing nothing for the Indian industry,” he noted. 

CIABC reiterated that the trade deal with the EU on alcoholic beverages should be no different from the UK, negotiations for which are currently underway. 

Further, the CIABC noted that most trade agreements have ‘most favoured nation’ status which would lead to other countries demanding parity if the agreements had any difference. 

Indian Malt growing popularity 

The call for better market access comes at a time when India’s spirits market undergoes transformation fuelled by the success of its single malts.  

Indian single malts soared 144% in 2021-22, beating the 32% growth in Scotch, data from IWSR Drinks Market Analysis shows. For the period until 2027, it predicts, consumption of Indian malts is set to grow 13% a year compared to Scotch at 8%. 

Brands like Indri, recently recognized as the world’s best whisky, alongside Amrut and Rampur, are challenging established global brands in a market valued at a staggering US$33 billion.  

This surge in popularity can be attributed to global accolades, rising affluence, and evolving consumer preferences, particularly during the pandemic. 

Indri maker Piccadily Distilleries hopes to expand capacity by 66% to 20,000 litres a day by 2025, reaching beyond the 18 foreign markets that make up 30% of its sales, noted founder Siddratha Sharma. 

While Indian spirits gain global popularity, major global players such as Pernod Ricard and Diageo are making strategic forays into the burgeoning Indian single malt market.  

New products like Longitude 77 and Godawan are being introduced to cater to shifting preferences. Kartik Mohindra, Pernod India’s Chief Marketing Officer, expresses confidence in the category’s unprecedented growth. 

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