Latest news with #ConfederationofIndianAlcoholicBeverageCompanies
India.com
19 hours ago
- Business
- India.com
Free Trade or Colonial Bias? After India-UK FTA, Homegrown Liquor Makers Accuse British Market Of Discriminating Against Indian Brands
New Delhi: The ink was barely dry on the India-UK Free Trade Agreement (FTA) when a new unease began brewing, not in trade offices, but in the distilleries of India. A growing number of Indian liquor companies say they are feeling left out and locked out. While the FTA has opened India's gates wider for British gin and Scotch with reduced import duties, the doors to the U.K. market, they claim, remain unfairly barricaded for Indian-made spirits. At the center of the anger is the Confederation of Indian Alcoholic Beverage Companies (CIABC), a body that speaks for India's local liquor manufacturers. According to its Director General Anant S Iyer, what India removed in tariff walls, the United Kingdom has maintained in 'non-tariff barriers', rules that may not show up in price charts but block access all the same. 'The United Kingdom and even the European Union (EU) do not allow fair imports of most Indian-Made Foreign Liquor (IMFL) products into their markets due to non-tariff barriers related to maturation and ingredients. We only wish that the Indian government had stood firm on the issue of non-tariff barriers,' he said. The bone of contention is the UK's strict definition of what can be sold as whisky. The British standard mandates that whisky must be matured for a minimum of three years. This rule is applied to both domestic and imported spirits. But Iyer says what works in cold European cellars does not work in the Indian climate. 'In India, the maturation is much faster due to the tropical climate. If we keep it for three years, we lose almost one-third of the spirit to evaporation. That is a financial loss. It also changes the flavour profile. It is a punishment for making whisky in a warmer land,' he explained. Because of the three-year rule, Indian whiskies that mature faster due to heat are disqualified from calling themselves 'whisky' under British law. Instead, they must be labelled as 'Indian spirits', a description that, Iyer says, cuts them off from mainstream whisky shelves and consumer attention in the United Kingdom and Europe. 'We want to be allowed to call it Indian Whisky or Indian Rum or Indian Brandy. Let consumers decide. Let the market decide. Right now, we are kept out simply because we do not age our spirits in cold basements,' he added. The CIABC has now urged the Indian government to actively pursue the matter with the United Kingdom. They argue that without reciprocal access for Indian products, the billion-dollar export vision for the Indian liquor industry will remain out of reach. 'The government has set an ambitious target of achieving $1 billion in exports from the Indian alcobev (alcoholic beverage) industry by 2030. However, without ensuring proper market access, it will be difficult to meet this target. Though Indian whiskies, rum, gins, wines, etc. have been winning accolades globally, the lack of removal of non-tariff barriers and absence of reciprocal market access will make this export target hard to achieve,' Iyer said. There is also growing concern about what is flowing into India. While British spirits are now allowed in at lower duties, Indian manufacturers fear that Scotch whisky and other bottled-in-origin (BIO) liquors may soon dominate Indian shelves by being routed through third countries at cut prices, hurting the premium Indian market before it even matures. To counter this, the CIABC has recommended that the Indian government fix a Minimum Import Price (MIP) on such foreign products. 'The government has incorporated MIP in the India-UK FTA on rum, brandy and other liquor products. The only exception on this count being Scotch Whisky/other whiskies/Gin originating from the United Kingdom,' Iyer added. He urged the government to monitor billing data and use technology to trace each bottle from port to shelf. 'We hope the government will ensure that Scotch whisky and other BIO spirits are not dumped in India at low import prices or routed through any other country at cheaper rates. This will hurt the growth of premium and luxury Indian brands,' he said. For now, India's liquor makers are pouring their hopes into diplomatic channels. Their demands include recognition, fairness and a level playing field. 'We do not want favours. We just want the right to sell our products under the names they deserve,' Iyer concluded.
Indian Express
3 days ago
- Business
- Indian Express
Will scotch get cheaper for Indian consumers after UK trade deal? Not by much, say experts
Scotch may get cheaper, but don't expect much relief at the liquor store. Tariffs on UK imports have been halved under the India-UK trade deal, but higher state-level taxes mean consumer prices may only dip 8-10 per cent, industry experts said. On the supply side, the reduction in customs duty by half to 75 per cent may boost margins for both British distillers and Indian producers who blend imported scotch with locally made whisky, they added. 'Customs duty typically accounts for around 20 per cent of the MRP across the country, while the bulk of taxes are imposed by the states. A reduction in duty by half could bring down consumer prices only by 8-10 per cent,' an industry representative said on condition of anonymity. Under the trade deal, India will immediately reduce tariffs on scotch and blended whisky imports by half to 75 per cent, and then gradually to 40 per cent over ten years, once the deal is ratified domestically by the two countries. The revision will apply to both bottled-in-origin (BIO) and bulk imports. According to Anant S Iyer, director-general of the Confederation of Indian Alcoholic Beverage Companies (CIABC), the tariff reduction could lead to newer scotch brands entering the domestic market with competitive pricing. 'Our fear is that a lot of new scotch brands from the UK can come in. These brands may not be famous here today, but they can come in at really aggressive prices that are comparable to Indian premium whisky. Already, some standalone importers are bringing in BIO whisky under 150 per cent duty with aggressive pricing,' Iyer said. Popular British scotch brands that could become slightly cheaper include Chivas Regal, Ballantine's, Glenlivet, Glenfiddich, and Johnnie Walker. Whisky was the UK's fifth-largest export product to India in 2024-25, valued at roughly $260 million, up 16 per cent from 2023-24. 'Import duties contribute only a fraction of the final price, with state excise, logistics, and distributor margins forming a large share of consumer cost. From a market standpoint, the FTA is more likely to influence product availability and premiumisation than spark a sudden demand surge. UK whisky makers may use this as an opportunity to expand brand presence,' said Naveen Malpani, Partner and Consumer Industry Leader, Grant Thornton Bharat. Industry expert Vinod Giri said a brand like Black Label in Delhi, priced at around Rs 3,500, may only get Rs 200-300 cheaper if the entire duty cut is passed on. While the reduction in consumer prices may not be much, British exporters and domestic producers who blend imported scotch could see their margins improve. Scotch is typically blended with Indian-made whisky in proportions ranging from 2 to 30 per cent, depending on the product's price segment. Popular whisky brands that blend imported scotch include Blenders Pride and McDowell's No. 1. 'Any duty reduction on Scotch whisky means the cost of production for Indian whisky makers who import it for blending goes down to that extent. While it's not likely to reflect in consumer prices, the fact is that if their costs go down, their bottom lines improve,' Giri said. 'Indian blenders will have savings per case. It depends on how much quantity of vatted malt scotch is used in the blends, and hence there will certainly be savings for them,' Iyer added. According to Giri, the reduction in customs duty will also result in bottled-in-India (BII) whisky becoming BIO over a period of 3-4 years. 'With standard Scotch whisky, if the entire duty cut is passed on, prices may drop by Rs 100-150 a bottle, bringing them close to BII whisky, which sells for around Rs 1,500. BII is also Scotch, just imported in bulk to avoid duties on packaging and other costs,' he said. 'But with the new duty set to drop to 75 per cent and then gradually to 40 per cent, it makes little commercial sense to bottle locally, invest in factories, and deal with operational hassles. Production costs are already lower in Scotland due to scale efficiencies, so they might as well ship scotch bottled from there and improve margins,' Giri added. 100 Pipers, Teacher's, Black Dog, and Black & White are among big brands that bottle imported scotch in India. Scotch distillers in the UK have welcomed the reduction in tariffs, which will give them greater access to the world's biggest whisky market by volume. 'The deal will support long term investment and jobs in our distilleries in Speyside and our bottling plant at Kilmalid and help deliver growth in both Scotland and India over the next decade,' said Jean-Etienne Gourgues, Chairman and CEO of Chivas Brothers, the firm behind popular whisky brands such as Chivas Regal and Ballantine's. Aggam Walia is a Correspondent at The Indian Express, reporting on power, renewables, and mining. His work unpacks intricate ties between corporations, government, and policy, often relying on documents sourced via the RTI Act. Off the beat, he enjoys running through Delhi's parks and forests, walking to places, and cooking pasta. ... Read More
Canada News.Net
3 days ago
- Business
- Canada News.Net
"Historic": Industry experts hail India-UK Free Trade Agreement
New Delhi [India], July 25 (ANI): The India-UK Free Trade Agreement has provided wider access to goods and services of both countries with industry leaders viewing the 'historic' deals as opening up opportunities to push more trade in the United Kingdom. Confederation of Indian Alcoholic Beverage Companies Director General Anant S Iyer said the FTA will strengthen the economic ties between the two countries across a lot of sectors. 'We believe that this FTA is pretty historic between India and the UK, because it will strengthen our economic ties between the two countries across a lot of sectors,' Iyer told ANI. India is set to benefit from the elimination or reduction of tariffs on about 99 per cent of its exports to the UK post the FTA. 'About 99 lines of business would benefit, especially very high labour intensive ones,' he said. He has also requested the government to have a minimum import price on alco-beverages, or have some mechanism whereby there is anti-dumping clauses to curb the entry of low-priced items into India. 'The second thing we are saying is to look at the country of origin. So be very clear that the rules of origin are followed so that you cannot get scotch diverted from some other country or wines coming from using loopholes,' Iyer said. British whisky producers will benefit from tariffs slashed in half, reduced immediately from 150 per cent to 75 per cent and then dropped even further to 40 per cent over the next ten years - giving the UK an advantage over international competitors in reaching the Indian market, an UK statement noted yesterday. Pankaj Chadha, Chairman, EEPC India, talking to ANI, affirmed optimism that engineering goods exports are poised to double with this FTA. 'We see that our exports will rise more than 100 percent. We are currently at 4.2 billion dollars of engineering exports. We hope that this will rise to 7.5 to 8 billion dollars in two to three years. It is a good deal, beneficial for both sides, and I'm complimenting the government for it,' Chadha added. Chadha also said that this FTA indicates other countries that India only signs win-win deals. 'We want to do it. We are ready to it. But it has to be win-win for both sides. There cannot be any one-sided deal. And we have drawn our red lines,' he noted. Archana Jahagirdar, Founder and Managing Partner of Rukam Capital said the India-UK Free Trade Agreement and the unveiling of the Vision 2035 document represent an essential calibration for entrepreneurs and investors across both economies. 'By unlocking near-zero tariffs for 99 per cent of Indian exports and significantly improving market access, these frameworks stimulate innovation, enable cross-border capital flows, and establish a conducive platform for the next-gen startups. The provisions on digital trade, skills mobility, technology, and critical minerals pave the way for VC-backed founders to build global-first companies from both countries. It will further enable the ecosystem to collaborate and co-innovate in emerging sectors, and seize new market opportunities in climate tech, AI, sustainability, and beyond,' added Archana Jahagirdar. Ajay Sahai, DG and CEO, FIEO, said, 'This is a historic is probably one of the biggest FTAs signed by India recently. This is important because it not only helps push traditional exports, which may be textile, apparel, footwear, gems and jewelry, toys, sports goods, marine products, food processing sector, but also some of the new sectors of export including organic chemicals, automobile, machinery and other engineering goods.' 'We are also seeing that India is exporting a lot services to the UK also. In fact, UK is one of the countries where services export is much more than the goods exports of India,' added Sahai. Jyoti Vij, DG, FICCI, said it's a significant way forward between the two countries. 'It's a path-breaking agreement that has been entered into by the two countries. There are going to be significant opportunities for various sectors, most particularly for the employment-intensive sectors where the market access will increase... There are very positive factors, like the Social Security Agreement, which eases the movement of people. Some of the visa restrictions have been removed. That will help in increasing business opportunities... When you have more export opportunities, you invest more in that sector. When you invest more, you employ more... That way, your market gets expanded, more export opportunities are always good for the economy's growth....,' she noted. India's average tariff on UK products will drop from 15 per cent to 3 per cent under India-UK FTA. Both nations desire to increase their trade to USD 120 billion by 2030. On May 6, Prime Minister Modi and PM Starmer had announced the successful conclusion of a mutually beneficial India-UK Free Trade Agreement (FTA). This forward-looking Agreement is aligned with India's vision of Viksit Bharat 2047 and complements the growth aspirations of both countries. The much-awaited landmark India-UK Free Trade Agreement was signed on Thursday, in the presence of Prime Ministers Narendra Modi and his British counterpart Keir Starmer, as PM Modi was on a two-day visit to the UK. (ANI)
Indian Express
15-06-2025
- Business
- Indian Express
Alcohol industry asks Maharashtra govt to rethink excise duty hike, calls for deliberations
Expressing concern over the increase in the excise duty on Indian made foreign liquor (IMFL) by up to 50 per cent by the Maharashtra government, the Confederation of Indian Alcoholic Beverage Companies (CIABC), the apex body of the Indian Alcoholic Beverage Industry, has urged the state government to reconsider the hike and hold deliberations with all stakeholders immediately. Sources in the excise department said the industry body was trying to protect its interest, but declined to comment on any possibility of a rollback. The state cabinet on Tuesday approved a hike in excise duty on IMFL, country liquor, and imported alcohol. The decision is expected to raise the state's annual excise collection by approximately Rs 14,000 crore as the prices of IMFL and premium foreign liquor brands are likely to increase by 50-80 per cent. The CIABC claimed that while the intent behind the proposed hike may be to enhance revenue collections by Rs 14,000 crore, the actual outcome may be contrary–driven by declining sales, rising illicit trade, and border leakages. The long-term impact could be deeply detrimental, not only for industry and employment, but also for public safety and overall state revenues. Stating that the CIABC had already written to the Maharashtra government urging it to start a consultative process with all stakeholders before releasing any final gazette notification, Anant S Iyer, Director-General, CIABC, said the hike in excise duty was projected to push maximum retail prices up by as much as 85 per cent, a step that could severely disrupt the market, erode the competitiveness of national brands, and jeopardise the availability of legitimate alcoholic beverages in the state. 'Such an unprecedented escalation in duties poses a serious deterrence to consumer access of established and reputed brands, compelling a shift toward lower-category products. This poses a serious threat to the stability of the IMFL industry in the state…such a move will have a far-reaching adverse impact,' Iyer said. He warned that higher MRPs often create a vacuum filled by illegal operators. The IMFL industry contributes approximately 60 per cent of the total excise revenue of the state.
Time of India
13-06-2025
- Business
- Time of India
Liquor sales volumes to decline after steep, abrupt increase in duty: CIABC to Maharashtra government
The recent hike in the excise duty by the Maharashtra government will push the IMFL whisky MRP by about 85 per cent, which will lead to a significant drop in sales volumes, industry body CIABC has said. Expressing concerns over the recent Maharashtra Cabinet decision to hike excise duty on Indian Made Foreign Liquor (IMFL), CIABC said it could severely disrupt the market, erode the competitiveness of national brands, and jeopardise the availability of legitimate alcoholic beverages in the state. Moreover, the government's decision to not increase the excise duty on Beer would create an "uneven playing field" in the alchoBev market, CIABC said, urging the state government to rethink and reconsider the hike, which may trigger serious consequences. This will also lead to downtrading in the state, compelling a shift toward lower-category products, CIABC said, adding that "if implemented in toto, will have far-reaching adverse impact". On Tuesday, the Maharashtra government decided to increase the excise duty on IMFL and country liquor. Now, IMFL will be subject to an excise duty that is 4.5 times the manufacturing cost. However, the state government has not decided to increase excise duty on beer, a move criticised by several alcohol beverage players. CIABC further said the IMFL industry contributes approximately 60 per cent of the total Excise Revenue of the state. Questioning the rationale for not increasing excise duty on beer, CIABC said the excise Duty collected from a single case of IMFL is equivalent to that from four cases of beer, underscoring the critical importance of this category. "Furthermore, duty increase on IMFL, without corresponding changes for a category, such as beer, will create an uneven playing field and distort category dynamics, leading to possible adverse impact on revenue. The Confederation of Indian Alcoholic Beverage Companies (CIABC) said a steep and abrupt increase in MRP (maximum retail price) would destabilise consumer accessibility and purchasing power, particularly within the mass-market segment which caters to the common man. "This will lead to a significant drop in legal sales volumes, overlooking the interest of industry and its substantial investment in the state," CIABC Director General Anant S Iyer said, adding that it will also endanger the employment of people engaged in the entire value chain from farm to consumer. This will also lead to the proliferation of illicit, spurious liquor and counterfeit brands. It will also increase dumping from neighbouring states and may erode Maharashtra's tax collection. "Maharashtra shares borders with states that are porous. These states have similar brands which have lower MRPs for IMFL. Any additional price escalation will trigger large-scale dumping (exfiltration) from these states, resulting in illicit inflows that damage legitimate trade and erode the state's tax base," it said. CIABC said the retail price structure must align with consumer affordability. "We request that further deliberations be held with all stakeholders to arrive at a balanced, data-driven, and sustainable course of action that protects both revenue interests and the long-term viability of the IMFL sector in Maharashtra," CIABC noted. Earlier in the day, the Brewers Association of India (BAI) defended the Maharashtra government's recent decision to increase excise duty on IMFL whisky and not on beer, saying that taxes on beer are already very high in the state compared to other markets. Tax reforms were undertaken for beer in 2018-19, and it was long overdue for spirits, said BAI, a body of the top three beer companies - UBL, Brewer Anheuser-Busch InBev (AB InBev), which owns brands as Budweiser, Hoegaarden and Corona along with Carlsberg which operates here with Carlsberg and Tuborg brands, together accounting for around 85 per cent of sales in India.>
