Diageo’s India Unit Fights FSSAI Ban on McDowell’s, Old Monk in Court

Diageo’s Indian unit United Spirits and Mohan Meakin approached the Bombay High Court on August 9 to challenge Food Safety and Standards Authority of India (FSSAI) orders banning fresh stock sales of McDowell’s No. 1 Celebration Matured Rum and Old Monk. The regulator prohibited manufacturing and sales after inspections found misleading labelling, substandard composition, and unauthorised flavouring. The court agreed to hear both sides on August 10.

Why FSSAI banned the brands

The FSSAI issued prohibition orders on June 29 and July 27 after inspecting United Spirits’ Baramati unit in Pune and finding misleading labels and substandard composition. The regulator alleged the products used artificial or nature-identical flavouring substances that mimicked natural profiles of alcoholic beverages. Existing stocks can only be cleared after relabelling as “Rum Flavoured Spirit,” a process United Spirits says cannot happen overnight due to label removal and State Excise Department approval requirements.

Diageo’s Royal Challenge also under scrutiny

Beyond the rum ban, FSSAI flagged Diageo’s Royal Challenge whisky on August 8 over false maturation claims. The regulator said the product does not support its label claim of being matured in American oak casks, as a major portion consists of non-matured spirit. Royal Challenge sells over 4.5 million nine-litre cases annually in India. United Spirits said it expects no financial impact and is engaging with FSSAI on labelling concerns.

Court to decide relabelling timeline

Acting Chief Justice Ravindra Ghuge and Justice Gautam Ankhad agreed to hear petitions from United Spirits and Mohan Meakin on August 10. Senior Advocate Dr. Birendra Saraf argued that relabelling cannot occur overnight and requires state approval. The bench noted that “everything cannot be shutdown overnight” but said it would not decide without hearing both sides, including the Attorney General on behalf of FSSAI.

Industry pushes back on regulations

Associated Alcohol & Breweries also challenged FSSAI notices in Madhya Pradesh High Court on July 31, with a hearing scheduled for August 13. Industry bodies including the Confederation of Indian Alcoholic Beverage Companies and International Spirits & Wines Association of India are separately raising the matter with FSSAI. Multiple liquor makers are contesting the regulator’s interpretation of flavouring and labelling norms across courts.

Final Thoughts

Diageo’s Indian operations face mounting regulatory pressure as the Bombay High Court examines whether the bans can proceed. The August 10 hearing will determine if United Spirits can resume sales after relabelling or faces extended prohibition on flagship brands.

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