FSSAI crackdown: Diageo to reformulate whisky, rum brands in India

Diageo has agreed to reformulate some of its most popular whisky and rum brands in India after the Food Safety and Standards Authority of India (FSSAI) raised objections to the use of added flavouring substances, Reuters reported.

The move follows one of the biggest recent food-safety crackdowns on the country’s liquor industry. FSSAI had earlier restricted the sale of certain Diageo and other liquor brands in some states over alleged violations involving flavouring and labelling.

Diageo will remove whisky flavouring from whisky and rum flavouring from rum as part of an understanding reached with the regulator, the report said. The changes are expected to apply to the affected brands manufactured across India, not just in states where restrictions were imposed.

The regulator is expected to withdraw the restrictions on the affected products under the arrangement, Reuters reported.

Which Diageo brands are affected?

The products caught up in the regulatory action include Royal Challenge and Antiquity Blue whisky manufactured in Madhya Pradesh, and McDowell’s No. 1 Celebration Matured XXX Rum produced in Maharashtra.

Royal Challenge is among United Spirits’ biggest-selling domestic whisky brands. Diageo says the brand sells more than 4.5 million nine-litre cases a year in India.

The regulatory dispute centres on the use of added flavouring substances to create the characteristic taste and aroma associated with spirits. FSSAI has objected to manufacturers using external flavouring to replicate characteristics that are expected to come from ingredients, distillation or maturation processes.

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The regulator’s action earlier this month also covered products from Inbrew Beverages, including Bagpiper Deluxe Whisky and Old Cask Deluxe XXX Rum.

Diageo to change formulation

Under the understanding with FSSAI, Diageo will reformulate the affected products to remove the disputed flavour additives.

The Economic Times reported that the changes are expected to be implemented within three months. A Diageo spokesperson said the company had engaged with FSSAI on its updated guidelines and had taken measures to bring its products in line with the revised requirements.

Diageo will also introduce clearer front-of-pack disclosures during the transition, according to Reuters. The labels will spell out the flavouring used in the products until reformulated versions are available.

For consumers, the immediate outcome is therefore likely to be changes to formulation and labelling rather than the permanent withdrawal of the brands.

Why did FSSAI act?

The dispute began after food-safety authorities found flavouring substances that they said could mislead consumers about the nature of the spirits.

FSSAI said some manufacturers were adding external flavouring substances to recreate the aroma and taste normally associated with whisky and rum, rather than developing those characteristics through the ingredients and maturation process. The regulator considered the practice inconsistent with applicable food standards.

The crackdown was significant because the affected products include widely sold brands across India’s large spirits market.

The regulator’s scrutiny has also extended beyond the use of flavouring.

Royal Challenge label under scrutiny

In a separate action, FSSAI warned Diageo that Royal Challenge’s claim that the whisky was “matured in American oak casks” could be misleading.

According to Reuters, the regulator said most of the spirit was not matured and included a substantial amount of non-aged grain neutral spirit. It also raised questions over the product’s reference to “Scotch” without specifying the type used.

The notice added another layer to the scrutiny of how liquor companies describe their products on packaging.

The issue is particularly important in India, where consumers often rely on labels to distinguish between spirits made through lengthy maturation processes and blended or neutral-spirit-based products.

Diageo had challenged the earlier ban

The latest agreement comes after United Spirits challenged the prohibition on McDowell’s No. 1 Celebration Matured XXX Rum.

In its court challenge, the company argued that the ban had been imposed without adequate due process and was premature because consultations around the relevant labelling requirements were still taking place. Diageo maintained that its products complied with the law.

The company’s latest decision to reformulate suggests a shift towards aligning its products with FSSAI’s interpretation of the rules.

Regulatory pressure widens

The action against Diageo is part of a broader increase in scrutiny of alcoholic beverages.

FSSAI has issued notices to multiple liquor companies over the use of added flavouring, while state-level authorities have also begun taking action. In Tamil Nadu, for example, the state-run liquor retailer TASMAC recently halted sales of 11 liquor varieties after FSSAI inspections found nature-identical and artificial flavouring substances.

Authorities have also examined packaging compliance.

Separately, Indian inspectors seized around 18,000 boxes of Diageo liquor bottles over alleged failures to carry markings showing that recycled plastic used in the packaging met safety requirements, Reuters reported earlier this month.

The multiple actions indicate that the regulator’s scrutiny is no longer limited to ingredients. Product descriptions, labelling claims and packaging are also coming under closer examination.

What it means for India’s liquor industry

The Diageo case could have implications beyond the company’s own portfolio.

A shift towards stricter enforcement of flavouring and labelling rules may require liquor manufacturers to review formulations, packaging and marketing claims across brands. Companies that use flavouring to standardise the taste of mass-market spirits could face pressure to alter recipes or provide more prominent disclosures.

For Diageo, the stakes are high because India is a key growth market and United Spirits has one of the country’s largest spirits portfolios.

The agreement with FSSAI could now allow the affected brands to return to normal sales in states where they were restricted, while giving the company time to transition to formulations that meet the regulator’s requirements.

The episode also marks a broader shift in India’s liquor market: regulators are increasingly looking beyond alcohol content and safety testing to examine how spirits are made, described and presented to consumers.

(With inputs from agencies.)