Diageo Contests FSSAI's Prohibition Order On McDowell's Rum In Bombay HC

Diageo has approached the Bombay High Court against the FSSAI's decision to prohibit its popular McDowell's rum brand over misbranding allegations, arguing that authorities bypassed due process and acted even as the food safety regulator was consulting the industry on the very labelling rules at issue, Reuters reported, citing a court filing.

Indian food safety authorities recently banned several whisky and rum brands manufactured by Diageo and domestic player Inbrew across some states, alleging mislabelling and improper use of artificial flavours.

The action, described as the biggest such crackdown in years, sent shockwaves through the country's $40 billion liquor industry. While Diageo had earlier informed Indian stock exchanges that it was contesting the decision in court, its non-public filing has now laid out detailed arguments for the first time against restrictions on "McDowell's No. 1 Celebration Matured XXX Rum," manufactured in Maharashtra and marketed by the company as one of its best-selling products, the report added.

Diageo's Legal Arguments

United Spirits, Diageo's Indian arm, told the court that the food safety officer who ordered the prohibition lacked the legal authority to do so and had sidestepped the standard adjudicatory process by relying solely on a food analyst's report to impose the stop-sale order. The company also pointed out that the Food Safety and Standards Authority of India (FSSAI) began consulting industry stakeholders on flavour labelling regulations just days after issuing the prohibition order.

In its August 1 filing, seen by Reuters, Diageo said the continued enforcement of the prohibition order, while the underlying issues remained under active consideration by the FSSAI itself, was "premature, disproportionate and commercially prejudicial."

The report notably added that the FSSAI was engaging with the industry only because alcohol companies themselves had requested such discussions.

According to online court records, the matter was briefly heard at the Bombay High Court on Monday, where the judge declined to grant any immediate relief and directed the federal government to file its response by August 19.

At the centre of the case is a disagreement over flavour labelling. The McDowell's bottle in question listed "artificial flavour (rum)" among its ingredients, but the FSSAI's prohibition order, contained in court papers, argued that rum flavour should instead be "characteristic based on the natural ingredients, fermentation processes and maturation techniques."

The dispute comes amid broader regulatory scrutiny of Diageo's operations in India. Indian inspectors earlier had seized around 18,000 boxes of the company's liquor bottles last week, alleging the packaging lacked required markings certifying the use of safe recycled plastic.

Diageo, which has called India its "consumer market of the decade," has maintained that it complies with applicable laws.