Author Archives: Janhavi Panani

Exclusive: Industry Veteran Suresh Menon dwells on impact on Street Prices of India-UK FTA

The alcobev sector has been a part of two critical Free Trade Agreements (FTAs) – the one India signed with Australia in early 2022, and the more recent Comprehensive Economic and Trade Agreement (CETA) between India and the UK. While the focussed beverage on the Australian one was wine, the UK agreement is focussed on spirits – notably whisky and gin.

Unlike most of the world, the Indian alcobev market is dominated by spirits whose share stands at circa 52%, compared to beer at just under 48%, with wine making up the minuscule remainder. To place it in a comparative context, the UK market is dominated by beer at nearly three-fourths of the market, followed by wine at a healthy 20%, with spirits bringing up the single-digit balance. Even within spirits, India is typically ‘browns’ country with whisky, brandy and rum having a dominant 96% share of all alcoholic spirits, with ‘white’ spirits (e.g., vodka, gin, tequila and flavored spirits) at a distant 4%. On the contrary, the UK is dominated by ‘white’ spirits at 60%, the balance 40% being ‘brown’ spirits (Figures are courtesy IWSR calendar year reports).

While exports of spirits from India to the UK have been traditionally subjected to NIL import duties at the UK end, India imposes an import tariff of 150% on all imports of alcoholic spirits from the UK.

Under the recent India-UK CETA, for whisky and gin, this will now come down to 75% on entry-into-force (EIF) or operational commencement of the CETA, followed by a phased annual reduction over ten years to a resting rate of 40%. For all alcoholic spirits other than whisky and gin, the comparable figures are 110% on EIF, going down over a ten-year period to a resting rate of 75%. However, this concession for all spirits (other than Whisky and Gin) will be subject to a Minimum Import Price (MIP) of USD 5 / USD 6 i.e., only imports valued abovethe threshold will be eligible for the concession – those belowthe threshold will continue to be charged at the current import tariff of 150%.

Whisky and Gin		Other Alcoholic Spirits
150%	Current Import Tariff (BCD + AIDC)	150%
75% ↓ 75%	On Entry into Force (EIF)	110% ↓ 40%
40% ↓ 110%	Phased annual reduction to a resting rate in Year 10 of	75% ↓ 75%
NA	Minimum Import Price (MIP)	USD 5 / USD 6*

*UOM unclear at present BCD – Basic Customs Duty

AIDC – Agricultural Infrastructure and Development Cess

The use of the term ‘Whisky’ in the CETA will make imports of all Whisky from the UK (e.g., those produced in Great Britain, Wales and Northern Ireland) eligible for the tariff reduction in addition to Scotch. The Rules of Origin embedded in the CETA mandate a minimum value addition of 35% within the UK to qualify for the beneficial import tariff into India.

While the intention of the reduction in tariff is to make it applicable to both forms of import – those imported in bottled form (also known as Bottled in Origin or BIO), as also to Bulk Spirit, imported to facilitate local production / bottling and to enhance the blend quality of Made-in-India products, historical HSN classification of the Bulk products may create some issues for imports which will need to be ironed out.

India is the largest importer of Scotch whisky from the UK in volume terms, primarily on account of its humongous import of Bulk Scotch, which constitutes nearly 80% of the country’s overall Scotch import. As mentioned earlier, the Bulk Spirit is used for bottling of Scotch whisky brands in India as also for blending with locally produced brands of IMFL.

While the Indian Cabinet has approved the CETA, the UK Parliament must approve the CETA before it can become effective – and hence the current expectations are that the EIF will be around mid-2026.

While state duties and taxes on Alcoholic Spirits vary state by state, on a national average they are in the range of 66-75% of the street price paid by consumers. That leaves a residual share of 25-34% to cover the CIF price (or cost of goods), local distribution and other expenses, customs tariffs (for imported products), local state levies (e.g., licence fees), and margins for the suppliers, wholesalers and retailers. When placed in this context, one can well visualise that the tariff reduction, though very welcome, is not going to have an earth-shattering impact on street prices. Additionally, given that the EIF is still some time away, various factors can impact the benefits of the tariff reduction, particularly in the current charged geopolitical environment of aggressive physical and trade conflicts – e.g., the INR-GBP forex rate, and the UK-India freight rates, to name only two.

That said, it’s a fresh and welcome reset to a long-standing trade relationship. Cheers to that!

Suresh Menon is a veteran of the Indian alcobev industry, having been a part of the sector for over 35 years – the views expressed herein are personal.

India Wine Market growing despite challenging times

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Given the global disruptions the Indian wine industry can look forward to good times.

Global wine consumption declined by 3.6% year-on-year to 214 million hectolitres (mhl), while production slumped by 4.8% to 226 mhl—its lowest level since the 1960s. This concurrent drop in demand and supply signals deep-rooted structural challenges, as consumer preferences shift and climate change continues to disrupt traditional wine-making regions.

Against this global backdrop, India has quietly emerged as a bright spot. The country now commands a 2.6% share of the world’s vineyard area, buoyed by a 4.1% CAGR in expansion—contrary to global trends. However, this optimism should be tempered with realism: wine still accounts for less than 1% of India’s alcohol consumption.

The India wine market size was valued at USD 229.0 Million in 2024. Looking forward, IMARC Group estimates the market to reach USD 892.0 Million by 2033, exhibiting a CAGR of 16.30% from 2025-2033. The rising disposable incomes, evolving consumer preferences, expanding wine tourism, increasing local production, supportive government policies, growing e-commerce accessibility, and the influence of the hospitality sector are factors responsible for the increasing number of India wine market shares.

Wine Growers Association of India (WineGAI) was started with a mission to grow India’s wine industry to ₹3,000 crore by 2030 by accelerating demand, improving quality, and shaping a supportive regulatory ecosystem. The vision was to establish India as a globally respected leader in wine production and a vibrant, wine-loving nation at home.

“WineGAI began in 2023 with just seven members and have since grown into an association representing 17 wineries across the country — and we’re actively working to bring more on board so as to be truly representative of the Indian wine industry.

“We’ve got a huge challenge ahead, given the slowdown in the wine category. I truly believe that we can overcome this by banding together and contributing to the larger cause. With your cooperation and involvement, we can,” says Ashwin Rodrigues, Secretary, WineGAI.

WineGAI consists of wineries with active brands as members. Key office bearers cannot serve two consecutive terms. There are mandatory monthly meetings of the Managing Committee. Member access to an exhaustive online database of over 200 documents containing statewise policies and correspondence. Full-time professionals are hired to manage the affairs of the association.

WineGAI successfully collaborated with The Lalit Group in celebrating the 8th annual Indian Wine Day. The event was a true celebration of Indian-ness, emphasising the rich flavours of Indian cuisine and wines. The Lalit Group has been instrumental in promoting Indian wine and making it a special day for wine enthusiasts.

WineGAI has also actively supported the event, further highlighting the growth and recognition of Indian wine.

The Ministry of Food Processing Industries (MOFPI) has recently established a Committee on Alcoholic Beverages to steer the sector’s growth and development. WineGAI actively participates in this committee, contributing its expertise to the industry’s advancement.

On March 29, 2025, WineGAI and HPMF signed an MoU to work together on promoting Indian wines in the hospitality space. The aim is to build awareness among hospitality professionals, encourage the use of Indian wines in the HoReCa sector, and drive demand through knowledge-sharing and smarter purchasing decisions.

The highlight of the year was the Bandra WineOut, a 1,800 strong consumer festival that reached out to a younger audience and made wine fun!

Their cooperation under the Joint Dialogue with Australia under the FTA got stronger. India gave them duty concessions in 2022, and the Australians have promised to help them in technical know-how and various other things.

Key Market Highlights: Strong market expansion driven by evolving consumer lifestyles & growing urban affluence; Increasing preference for premium, imported, and artisanal wine varieties and Rising focus on sustainable viticulture and eco-friendly packaging solutions.

The Indian wine market is experiencing a shift towards premiumisation as consumers increasingly seek high-quality, imported, and artisanal wines. With rising disposable incomes, evolving social drinking habits, and greater exposure to global wine culture, there is growing demand for fine wines from countries like France, Italy, Australia, and Spain. Additionally, domestic wineries are expanding their premium offerings to compete with global brands, focussing on quality production, innovative blends, and vineyard tourism.

By 2025, the demand for premium and imported wines is expected to surge further, driven by urban millennials and professionals who view wine as a sophisticated lifestyle choice. This trend is also fuelling investments in wine education, wine-tasting events, and the expansion of wine retail and e-commerce channels.

India’s domestic wine industry is growing steadily, with wineries in Maharashtra, Karnataka, and Himachal Pradesh focussing on high-quality local production. Improved viticulture practices, better grape varieties, and technological advancements in winemaking are enhancing the quality and competitiveness of Indian wines. Additionally, vineyard tourism is gaining popularity, with wineries offering immersive experiences such as wine tasting, vineyard stays, and food pairings to attract enthusiasts.

By 2025, the domestic wine sector is expected to witness increased investment in infrastructure, production capabilities, and promotional activities. The government’s supportive policies, including relaxed excise duties in some states and incentives for local wine producers, are also expected to boost the market, making Indian wines more prominent in both domestic and international markets.

Sustainability is becoming a key focus in India’s wine market, with producers adopting eco-friendly practices in both winemaking and packaging. Consumers are increasingly conscious of environmental impact, driving demand for wines packaged in biodegradable materials, lightweight glass bottles, and recyclable cartons. Wineries are also adopting sustainable viticulture methods, such as organic farming, water conservation, and solar-powered production facilities.

By 2025, the shift towards sustainability is expected to accelerate, with wine brands emphasising green certifications and eco-conscious branding to appeal to environmentally aware consumers. This trend aligns with global movements towards sustainable consumption, positioning Indian wineries to attract both domestic buyers and international export opportunities.

The Indian wine market is experiencing significant growth, driven by factors like a rising middle class, urbanisation, and changing consumer preferences. While still a relatively small industry compared to spirits, Indian wine production is increasing, and the market is expected to continue its expansion. Key trends include the adoption of wine as a preferred beverage, its use as a status symbol, and the increasing perception of it as a healthier alternative to stronger alcohol.

A significant portion of the market is supplied by domestic wineries, with imports accounting for a smaller share. Wine is increasingly becoming a preferred beverage, especially among younger demographics and urban consumers.

Wine has become a symbol of sophistication and an indicator of higher social standing among some Indian consumers. Wine is perceived by some as a healthier choice compared to stronger alcoholic beverages. Wine producers are exploring new grape varieties, fermentation methods, and blending techniques to cater to evolving consumer tastes.

Major Production Regions: Maharashtra, particularly the Nashik region, is the largest wine-producing area in India, with other regions like Bangalore and Himachal Pradesh also contributing.

Regulations and Taxation: Government regulations and taxation policies can impact production costs and pricing, which is a key factor in the Indian wine market.

Impact of COVID-19: The pandemic had a temporary impact on the wine industry due to lockdowns and economic contraction, but the market has since rebounded.

Indian wineries are focussing on building strong brands to enhance their competitiveness and reach a wider consumer base.

Taxes could affect Indian Alcobev Industry

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High taxation significantly burdens the Indian alcohol industry by increasing production costs, impacting profitability, and potentially driving consumers towards illicit alternatives. While GST doesn’t directly tax alcohol, increased taxes on input materials and logistics contribute to higher retail prices. This, coupled with state-specific excise duties and other levies, leads to a complex and fragmented market with varying prices and access points.

Indian alcohol market is estimated to be valued at 60.11 bn in 2025 and is expected to reach USD 101.10 bn in 2032, exhibiting compound annual growth (CAGR) 0f 7.7% from 2025 to 2032.

India’s alcoholic beverage industry faces regulatory hurdles like liquor bans and high taxation, impacting revenue and market share. Despite these challenges, the industry is projected to grow significantly, driven by premiumisation and evolving consumer preferences.

High taxation, particularly state-level excise duties and other levies, significantly burdens the Indian alcohol industry, impacting both producers and consumers. The industry contends with high tax burdens, with taxes often comprising 65-80% of the final retail price. This complex taxation structure, including state excise duties, VAT, and various fees, restricts financial flexibility and profitability.

In addition, the industry is hobbled by significant compliance overheads and a fragmented distribution ecosystem, where regulatory variations across states create logistical inefficiencies and increased costs. The working capital cycle is often elongated due to delayed payments from distributors and high inventory carrying costs, disproportionately affecting small and medium-sized enterprises (SMEs). For these players, who typically operate on EBITDA margins as low as 10–12%, any downward pressure on pricing can be economically unsustainable.

Indian spirits—particularly whisky, rum, and country liquor—have only a marginal share in global markets. According to data from the Agricultural and Processed Food Products Export Development Authority (APEDA), India exported alcoholic beverages worth USD 322 million in FY 2022–23, with Indian-made foreign liquor (IMFL) comprising a major portion. In comparison, the UK exported over £6.2 billion worth of whisky alone in 2022, highlighting the asymmetry in export capacities. The entry of global players with deep pockets, established branding, and premium positioning will make it impossible for Indian brands to compete against them and scale sustainably or capture premium market share. This reduced market share could ultimately lead to downsizing, plant closures, and stagnation in rural supply chains that depend on the sector for income. If local manufacturers lose market share, states could face a decline in excise revenue and employment generation.

Tax increases on alcoholic beverages can negatively impact the alcobev industry in several ways. They lead to higher prices for consumers, potentially reducing demand, and can also increase the costs for producers due to taxes on inputs. Furthermore, tax increases can lead to a decrease in sales volume, impacting the industry’s revenue and potentially leading to job losses.

Reduced Demand and Sales Volume: Higher taxes translate to increased prices for consumers, which can make alcoholic beverages less affordable, particularly for budget-conscious consumers.

This price sensitivity can lead to a decrease in the quantity of alcohol purchased, impacting sales volume for manufacturers and retailers. Some consumers might switch to cheaper brands or even substitute with other alcoholic products, impacting specific segments of the industry.

Increased Production Costs: Even if not directly taxed, the production process of alcoholic beverages involves various inputs like bottles, labels, and packaging materials, which are subject to taxes like GST. The cost of these inputs can rise due to higher taxes, increasing the overall production cost for manufacturers.

This cost pressure can be particularly challenging for smaller or craft producers who may have less financial flexibility to absorb these increases.

Impact on Revenue and Employment: Reduced sales volume and increased production costs can significantly impact the industry’s revenue and profitability. This can lead to potential job losses in the manufacturing, distribution, and retail sectors of the alcobev industry.

The industry might also face challenges in terms of cash flow and working capital, especially when dealing with tax refunds for input costs.

Potential for Unintended Consequences: Some studies suggest that higher taxes may lead to increased illicit production and sale of alcohol to avoid taxation, which can pose public health risks and further impact legitimate businesses. Consumers may also resort to cheaper alternatives or reduce consumption in other areas to afford alcohol, potentially impacting other industries.

While the industry may argue that tax increases do not reduce alcohol-related harm, some research suggests that price increases can lead to reduced consumption, especially among heavy drinkers and young people.

Industry Arguments: The alcoholic beverage industry often argues that tax increases unfairly burden the industry and consumers, and may not be effective in reducing alcohol-related harm. They may also highlight the potential negative impact on employment and tourism, particularly in areas where the industry is a significant contributor to the local economy.

The industry may also argue that other measures, such as public awareness campaigns and responsible drinking initiatives, can be more effective in addressing alcohol-related issues.

Policy Considerations: Policymakers need to consider the potential economic and social impacts of tax increases on the alcobev industry when formulating policies. Balancing the need to generate revenue and address alcohol-related harms with the potential negative consequences for the industry and consumers is crucial. Consultation with the industry, public health experts, and consumers can help to develop more effective and balanced policies.

Overall, while higher taxes on alcoholic beverages can be a tool to address public health concerns and generate revenue, they can also pose significant challenges for the alcobev industry and potentially lead to unintended consequences. A careful and balanced approach is necessary when considering tax policy changes in this sector.

Maharashtra Made Liquor (MML) Guidelines Announced to Boost Local Industry

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In a move aimed at reviving underutilised liquor manufacturing units and offering consumers more affordable choices, the Maharashtra Government has formally introduced a new category of alcoholic beverage—Maharashtra Made Liquor (MML). The decision, approved by the State Cabinet in July, has now been formalised through a Government Resolution (GR) amending the Bombay Foreign Liquor Rules, 1963.

The policy positions MML as a distinct sub-category under the Indian Made Foreign Liquor (IMFL) framework. To qualify, the liquor must be grain-based and produced using rectified spirit sourced exclusively within Maharashtra.

One of the biggest attractions for producers and consumers is the reduced excise duty, 270% for MML compared to 450% for IMFL. At an assumed manufacturing cost of ₹400 per litre, IMFL retails at roughly ₹2,200 (including ₹1,800 in excise), while MML is expected to cost around ₹1,480 (with ₹1,080 excise), making it about ₹700 cheaper per litre. The government has set a minimum retail price of ₹148 for a 180 ml bottle of MML, compared to ₹205 for IMFL and ₹80 for country liquor.

Under the new guidelines, MML manufacturers must have their registered head office in Maharashtra; maintain at least 25% state-resident shareholding; avoid producing or marketing MML outside the state; and register their brands within one year. Third-party production is not allowed, though leasing of plant capacity is permitted if the facility remains dedicated to MML production. If sold outside Maharashtra or if rules are violated, the MML status will be revoked, the guidelines state.

Economic Impact

According to reports, Maharashtra currently has 48 licensed IMFL manufacturing units, but only 10 dominate production; many operate at minimal capacity just to retain their licences. The government hopes MML will revive idle plants and generate up to ₹3,000 crore in additional annual revenue. The move is part of wider excise reforms targeting ₹14,000 crore yearly collections through measures including AI-powered monitoring of production and sales; new divisional excise offices; revised duty structures, IMFL at 3× to 4.5× manufacturing cost (capped at ₹260/litre), country liquor up to ₹205 per proof litre; and higher licence fees for FL-2 (retail) and FL-3 (bars) outlets.

In 2024-25, Maharashtra excise revenue stood at ₹25,467.96 crore. Of the six excise regions, Nashik region (Nashik, Nandurbar, Dhule and Jalgaon) earned ₹6,186.82 crore; followed by Chhatrapati Sambhajinagar region (Chhatrapati Sambhajinagar, Beed, Jalna, and Dharashiv) at ₹5,995.07 crore; Pune region (Pune, Ahilyanagar and Sholapur) at ₹5,809.79 crore; Thane region (Mumbai City, Mumbai suburbs, Thane, Palghar and Raigad) at ₹4,513.02 crore; Kolhapur Greater Region (Kolhapur, Satara, Sangli, Ratnagiri and Sindhudurga) at ₹1,265.21 crore; Nagpur region (Nagpur, Wardha, Bhandara, Gondia, Chandrapur and Gadchiroli) at ₹874.43 crore; Nanded region (Parbhani, Latur, Nanded and Hingoli) at ₹592.73 crore; and Amravati region (Amravati, Buldhana, Akola, Washim and Yavatmal) at ₹230.09 crore.

Unlike IMFL’s foreign-style blends, MML will feature simple, traditional flavours such as orange, cumin and herbs. Popular varieties are expected to include Santra, Chandni and Sugandhi. Packaging is expected to be basic, in bottles or sachets and to be labelled “For sale only in Maharashtra”. Distribution will focus on rural and semi-urban markets, though MML will also be available in urban centres. Production is said to be undertaken by state-run units, cooperative sugar factories, and private distilleries.

By creating a regulated, lower-cost option, the government hopes MML will help curb illicit liquor trade and reduce consumption of illicit brews.

UK Tax Burden Hurting Scotch Whisky

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75% of companies expect to defer investment, or invest outside of the UK due to the high tax burden
One in four Scotch distillers expect to make job cuts as a result of economic headwinds
76% say an increase in duty would make them less likely to take forward capital investment and recruitment

Three in four Scotch Whisky companies will defer UK investment, or invest elsewhere, due to the high tax burden, according to research undertaken by the Scotch Whisky Association (SWA). The SWA represents over 90 companies from across the Scotch Whisky industry, that collectively account for the majority of Scotch Whisky production (around 97% of the industry).

India is likely to be one of the destinations for investment as enunciated earlier by the SWA Chief Executive, Mark Kent who had stated after the India-UK free trade agreement was signed that “The deal is good for India too, boosting federal and state revenue by over £3bn annually, and giving discerning consumers in a highly educated whisky market far greater choice from SME Scotch Whisky producers who will now have the opportunity to enter the market.”

Kent had mentioned how “India is Scotch whisky’s largest export market by volume, with the equivalent of more than 192 million bottles exported there in 2024. The volume of Scotch whisky exports to India have grown by more than 200% in the past decade alone, and whisky is hugely popular in India. In fact, India is the largest whisky market in the world. But while many Indian consumers are keen to add a bottle of Scotch to their shelves, bars and collections, Scotch whisky has just a 3% share of the Indian whisky market. There is huge potential for that to grow with the free trade agreement announced in Spring 2025.”

Over two thirds of price goes in taxes

Going back to the research, undertaken between February and June 2025, reveals the extent of concern companies face about the current levels of alcohol duty in the UK – with over two thirds of the average-priced bottle of Scotch Whisky collected in tax.

Following a 10.1% rise in duty in March 2023, and a 3.65% rise announced in October’s Budget, 87% of respondents to SWA’s members’ survey expressed concern that the rate of excise duty will rise once again in this Autumn’s Budget.

Any further rise in duty will have an impact not only on investment, but also recruitment, according to the companies – at a time where the whole industry employs or supports 66,000 jobs across the whole UK. A quarter of companies now expect their overall headcount to decrease given the current levels of alcohol duty.

As well as direct job impacts, there is increasing risk of knock-on job losses across the extended supply chain as distillers reduce production in the face of global tariffs impacting exports.

This research comes as the industry faces significant strain. At the start of the year, over half of those surveyed expected operational costs from Government policies – for example, EPR fees, NIC increases, and tariffs – to increase by 10%; with 40% now expecting that figure to be over 20%. Despite the increased duty levels, HMRC data shows that Treasury spirits duty receipts have not increased and failed to deliver the forecasted revenue growth.

Kent added, “The Scotch whisky industry has a long track record of investment and growth that has benefitted communities across Scotland and the supply chain across the UK. It is also an optimistic and confident sector that believes in creating future growth.

“However, the positivity of the industry is being severely tested by the relentless impact of domestic policies and global circumstances.

“The industry is facing the significant challenge of US tariffs and increasing domestic pressures at a time it would otherwise be looking to support the Prime Minister’s growth mission. This high tax burden is not delivering the expected additional revenue for the Government, but it is costing jobs and investment.

“At a time when the country needs economic growth, we cannot fail to back one of the UK’s longstanding successes.”

Scotch Whisky Industry Records £5.4BN Global Exports in 2024

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High taxes on Scotch whisky, specifically a recent 10.1% duty increase and a subsequent 3.65% increase, are hurting the UK alcobev industry by increasing costs for consumers and businesses, potentially leading to reduced investment and job losses, and ultimately impacting the economy. The industry argues that these tax hikes are counterproductive, leading to decreased government revenue and stifling growth.

The Scotch Whisky Association (SWA) has released global export figures that show the value of Scotch exports stood at £5.4bn in 2024. The equivalent of 1.4bn 70cl bottles of Scotch whisky were exported last year, equating to 44 per second.

The figures, released, show a decrease of 3.7% on 2023 exports by value. The Scotch Whisky Association has called on the UK and Scottish Governments to provide more support for the industry as distillers warn that the combination of pressure on consumer spending, increased domestic tax and regulation, and turbulent global trade, may continue to impact exports into 2025.

Exports by volume have increased by 3.9%, which the industry says reflects the changing trends in global consumer preferences and challenging trading environment.

India has regained its position from France as the world’s number one Scotch whisky export market by volume, with 192m bottles exported, while the United States retains its long-held position as the largest export market by value, worth £971m in 2024.

However, the whisky industry has warned that global trading conditions remain turbulent at the beginning of 2025 and have called on the UK government to do what it can to mitigate growing domestic pressures on the industry. This includes reducing excise duty on the industry, with 70% of the average priced bottle now collected in tax, reconsider the financial impact of Extended Producer Responsibility (EPR), and accelerate trade talks to reduce tariffs and market access barriers in key markets, like India.

Commenting on the export figures, Mark Kent, Chief Executive of the Scotch Whisky Association said, “Despite the resilience of the Scotch Whisky industry, 2024 has been a challenging year.

“At home, distillers are being stretched to breaking point, as consumers bear the brunt of a 14% increase on the tax on every bottle of Scotch Whisky in the last 18 months alone. The cumulative effect of inflationary impacts on input costs such as cereals, energy and shipping, and the increased tax and regulatory costs, including the substantial cost of EPR coming later this year, are being fed through to consumers when they are tightening their belts.

“Overseas, the tectonic plates of trade are shifting, and exports to traditionally strong markets in the EU and North America have become much more challenging. We continue to support UK Government to promote strong and open trade relations with key export markets around the world, and particularly to advance negotiations on FTA with India, and engage with the US Administration. The United States remains a key market for Scotch, and where the industry contributes to the US economy through direct investment and jobs.

“But support for the industry’s global success starts at home. For too long, the industry has been taken for granted, with the misguided and simplistic belief that decisions taken in Scotland and the wider UK won’t impact an industry which exports 90% of its product, supports a large local supply chain and plays a valuable part in attracting tourists to Scotland. The Scotch whisky industry is a proven driver of economic growth, jobs and investment, and needs an environment free from the shackles of excessive taxation, regulation and uncertain operating costs. The UK government must redouble its efforts to back Scotch producers to the hilt, as promised by the Prime Minister.”

These are challenging times for the beverage alcohol industry. Changing weather patterns and wildfires are affecting production of essential ingredients like grapes, barley, and hops. Many consumers are switching to low- and no-alcohol beverages. And now, tariffs.

Research by the Scotch Whisky Association (SWA) indicates that a high tax burden is causing three out of four Scotch whisky companies to either defer or shift investment away from the UK. This reluctance to invest can impact expansions, infrastructure improvements, and innovation within the industry.

Furthermore, a quarter of distillers are considering reducing headcount due to economic pressures and the current alcohol duty levels.

The industry currently supports 66,000 jobs across the UK, and any further tax increases could lead to a decline in employment within the sector and its related supply chain. High domestic taxes can make Scotch whisky more expensive compared to other spirits, both domestically and internationally, potentially impacting its competitive edge.

Tariffs already add pressure, and high domestic taxes further exacerbate this. When a 25% US tariff was imposed on single malts in 2019 (later suspended), the industry lost over £600 million in exports to the US over 18 months. This highlights how external factors, combined with domestic tax burdens, can significantly hinder export performance.

Despite duty increases, HMRC data hasn’t always shown the expected rise in spirits duty receipts. This suggests that excessive taxation can potentially discourage consumption, leading to lower-than-anticipated tax revenues, a point raised by the SWA.

While recent changes to alcohol duty have included a draught relief to support the hospitality industry, the overall duty increases can still impact the price of drinks, including Scotch whisky, in bars and restaurants. This can affect consumer spending in the on-trade sector and subsequently impact the businesses that rely on alcohol sales.

Alcohol taxes are implemented to generate revenue and address public health concerns, excessive or poorly structured taxes can have detrimental consequences for the UK alcobev industry, particularly Scotch whisky, by impacting investment, jobs, exports, and competitiveness.

spiritsEUROPE Wants Zero Reciprocal Tariff for Spirits between EU and US

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spiritsEUROPE has regretted that the EU-US political agreement has, for now, failed to secure the long-overdue restoration of the zero-for-zero framework for spirits. European Union spirits exports to the US are subject to a 15% import tariff.

**Hervé Dumesny, Director General of spiritsEUROPE**

“We welcome the broader principle of an agreement to de-escalate trade tensions and provide greater predictability to businesses,” said Hervé Dumesny, Director General of spiritsEUROPE. “While we thank the European Commission for its ongoing efforts to include spirits in the list of exemptions, the failure thus far to reinstate zero-for-zero for our products is a missed opportunity. The continued application of US tariffs on EU spirits, now at 15%, places our products at a substantial competitive disadvantage, limits consumer choice, and undermines investment and growth in our sector on both sides of the Atlantic.”

Originally agreed in 1997, the zero-for-zero arrangement eliminated tariffs on virtually all spirits traded between the EU and the US. It proved to be a powerful engine of economic exchange, boosting transatlantic spirits trade by 450% between 1997 and 2018, spurring cross-investment, and strengthening the cultural and economic bonds between our two sectors. European spirits enjoy strong demand among American consumers, driving substantial growth and job creation both in US retail and hospitality and in the EU regions where these products are made.

“This situation remains unbalanced and unsustainable,” Hervé Dumesny added. “We call on both the EU and the US to stay engaged at the negotiating table and secure the full restoration of the zero-for-zero framework as soon as possible. This must include the permanent removal of US tariffs on EU spirits and the complete repeal of any suspended EU retaliatory measures on US spirits. A truly tariff-free environment is essential to unlock the full potential of our shared industry and safeguard the many jobs it supports, from farmers and distillers to logistics, retail and hospitality across the Atlantic.”

It said that spiritsEUROPE is ready to work constructively with the European Commission, US counterparts, and industry partners to achieve a durable, balanced, and tariff-free solution that reflects the longstanding spirit of EU-US cooperation in the spirits sector.

Tilaknagar Industries ups investment in Samsara-maker Spaceman Spirits Lab

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IMFL manufacturer, Tilaknagar Industries Limited (TI) has made a follow-on investment of ₹10.66 crore in Spaceman Spirits Lab Private Limited (SSL), the maker of premium craft spirits such as Samsara Gin; Sitara Rum and Amara Vodka.

While ₹9.15 crore is part of the previously announced ₹13.15 crore investment envisaged under the September 2024 agreement between TI and SSL, the balance ₹1.51 crore is being invested to acquire shares from some of the early shareholders in SSL.

With this investment, TI’s stake in SSL increases from 12.98% to 21.36% on a fully-diluted basis. The definitive agreements further provide TI with the option to invest additional capital or acquire further stake from other shareholders at a pre-determined valuation methodology, subject to SSL achieving certain pre-agreed milestones.

Ameya Deshpande, President – Strategy and Corporate Development, Tilaknagar Industries said, “Our continued investment in Spaceman Spirits Lab reflects our conviction in the enduring appeal of premium craft spirits in a rapidly evolving market. Their thoughtfully curated portfolio featuring Samsara Gin, Sitara Rum and Amara Vodka demonstrates innovation, quality and craftsmanship. We are excited to deepen our partnership as Spaceman enters a new phase of growth.”

According to TI, the company is subscribing to 1,772 equity shares and 11,752 Compulsorily Convertible Preference Shares for ₹9.15 crore. Further, TI is acquiring 2,236 equity shares from existing SSL shareholders for ₹1.51 crore.

Aditya Aggarwal, Founder and Managing Director, Spaceman Spirits Lab, said, “We are thrilled to deepen our partnership with Tilaknagar Industries as we embark on a bold new chapter. With Tilaknagar’s extensive distribution network and industry leadership, we are excited to take our iconic brands to every corner of India.”

SSL is preparing to diversify its product portfolio with strategic forays into new categories including whisky, heritage liqueurs and tequila. “We are anticipating robust performance in the current fiscal, with projected revenue growth of nearly 70% and volume growth of about 60% in FY26,” Aggarwal added.

Tilaknagar Industries is expected to leverage its distribution network to sell Samsara Gin, Sitara Rum and Amara Vodka in certain states in India and abroad.

Carib Brewery Enters India with Premium Strong Beer

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Caribbean-headquartered Carib Brewery has launched its Carib Premium Strong Beer in India, marking a key milestone in the brand’s international expansion. Carib’s entry into India is in partnership with Globus Spirits Ltd., a leading player in India’s alcoholic beverage industry. The beer is being locally produced through Globus Ansa Private Ltd., a joint venture between Globus Spirits and Carib’s parent company, Ansa McAL.

“At Globus Spirits, we’ve always believed in crafting experiences that transcend borders—and Carib Premium Strong Beer is a perfect reflection of that,” said Shekhar Swarup, Joint Managing Director, Globus Spirits. “This launch is more than introducing a new beer; it’s about celebrating the spirit of two vibrant cultures brought together by cricket, bold flavours, and good times.”

Targeted initially at five key cities in Uttar Pradesh—Lucknow, Kanpur, Varanasi, Ayodhya, and Prayagraj—Carib Premium Strong Beer is crafted to appeal to Indian preferences. With 8% alcohol by volume, a medium body, and a crisp, floral finish, the beer is designed to pair well with India’s spicy and flavour-rich cuisine.

The India launch is part of a broader international strategy led by Adrian Sabga, Managing Director (International & Business Development) at Carib Brewery, who has identified India and Greece as focus markets by the end of 2025. This push is supported by a $200 million investment in a modernised production facility in Champs Fleurs.

Smirnoff Introduces Minty Jamun, Mirchi Mango and Zesty Lime

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Smirnoff is set to shake up India’s flavour landscape with the launch of three bold new variants—Minty Jamun, Mirchi Mango and Zesty Lime—created especially for the evolving tastes of modern India. The exciting new flavours are available in Karnataka, Uttar Pradesh, Haryana and Maharashtra.

Whether it’s a fiery Mirchi Mango margarita, a Minty Jamun spritz with nostalgic flair, or a simple Zesty Lime soda pitcher, this new range unlocks versatile drinking possibilities—whether sipped, or mixed.

“We’re seeing a clear shift in how young Indians approach their favourite spirits—they want global brands to build a stronger local connect that is fresh and premium and yet playful. With Minty Jamun, Mirchi Mango, and Zesty Lime we’re not just offering new flavours, we’re creating moments of discovery that are vibrant, social, and rooted in today’s cultural codes,” said Ruchira Jaitly, CMO, Diageo India.

Each flavour has been thoughtfully developed to reflect the mood and momentum of the modern Indian consumer: Minty Jamun is a throwback with a twist—evoking childhood nostalgia with a fresh, modern take; Mirchi Mango piques curiosity with a sweet-spicy punch inspired by India’s love for heat and tropical fruit; and Zesty Lime brings an easy-going zing that makes it a go-to for group occasions and cocktail starters.

The launch is anchored in the brand’s new India-first campaign “Flavour is a Vibe” — a call to explore taste with freedom, fun, and community.