Scotch Whisky makers fuming as India keeps tariffs

By Chris Mercer

- Last updated on GMT

Related tags: Scotch whisky, International trade

The Scotch Whisky Association says it will ask the EU to make an
official complaint at the WTO if India does not lift excessive duty
tax on imported spirit drinks.

The association (SWA) said it was disappointed that the Indian government's new budget had not made any progress in reforming what the SWA called a "discriminatory fiscal regime"​ against imported spirits.

The association said the overall duty burden faced by Scotch Whisky ranged from 212 per cent to 525 per cent.

The European Commission has been investigating India's import regime for EU spirits and wines since September last year.

Peter Wilkinson, SWA international affairs director, said he hoped for a negotiated solution, but "if this does not prove possible, we will have to weigh our options and may be obliged to press the EU to take these issues to World Trade Organisation dispute settlement.

"Domestic interests appear to have outweighed international commitments and, as a result, market access continues to be unfairly restricted by a protectionist tariff and tax system. Indian consumers are being denied the opportunity to buy international spirits brands at an affordable price."

The high tariffs on spirits imports have forced many consumers onto the grey market, said David Williamson, SWA spokesperson, to BeverageDaily.com​.

He said the trade barriers increased the incentive for fraudsters on the spirits market. "India makes 55m cases of whisky every year and half of that is counterfeit."

The SWA, said Williamson, wanted India to halve its basic customs duty for spirits, to 75 per cent, and replace additional tax on spirits with a levy to encourage "more affordable retail prices and more choice for consumers"​.

Emerging markets, particularly those in Asia, increased their importance for Scotch Whisky makers in the first half of last year. The area drove exports past the £1bn barrier for the first time since 1997.

Exports to India rose 19 per cent to a value of £7m, despite the high import tariffs, although the SWA estimated Scotch made up less than one per cent of India's spirits market.

It was China that led the charge with 124 per cent growth. The growing craze for drinking Scotch Whisky with green tea leaves, mojito style, meant Scotch exports to China hit £22m in the first half of last year.

Promising Asian performances helped to offset declines in Europe, the SWA said.

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