The European Commission has sought a fourth round of WTO (World Trade Organisation) consultations with the Indian Government on violations by some States on import of wine and liquor.
A spokesperson for the Scotch Whisky Association (SWA), an industry body representing the interests of liquor and wine manufacturers in Europe, told Business Line that certain States had violated India's WTO obligations with regard to import of wine and access to markets.
The SWA Director of Government and Consumer Affairs, Mr Campbell Evans, said unless these States respond “positively and quickly” on the issues raised during the consultations, the Commission will request the establishment of a dispute settlement panel, as early as January 2010.
The States which have been identified by the Commission are: Andhra Pradesh for tax discrimination and market access restrictions; Delhi for tax discrimination; Karnataka and Maharashtra for tax discrimination (against EU wines), and Tamil Nadu for market access restrictions.
The United Spirits Business Head (Wines), Mr Abhay Kewadkar, said such restrictions are not only imposed on wine imported from EU countries but also between States within India. He said if wine is imported from Maharashtra into Karnataka, the State levies an additional excise duty of between Rs 18 and Rs 70 a litre based on certain slabs and an import duty of Rs 300 per litre.
Similarly, if wine made in other States is sold in Maharashtra, the State levies a 150 per cent duty on the base price of bottled wine.
In the case of Tamil Nadu, no liquor or wine manufacturer can sell its brands if not registered with the Tamil Nadu State Marketing Corporation before 1984. “I would have expected our own States to see reason. Because of the pressure from the EU as well as from WTO, hopefully they will change their policies,” Mr Kewadkar said.
New norms
Meanwhile, the SWA has come out with new regulations on the production and labelling of Scotch Whisky to give it legal protection.
The spokesperson said the regulations reaffirm that for a drink to be labelled or marketed as Scotch Whisky it must have been distilled and matured wholly in Scotland in accordance with the regulations.
On its stand on Indian-made whisky, the spokesperson, however, said: “Any products distilled and matured in India and marketed in India as Indian will not be impacted.”
According to the new regulations, five categories of Scotch Whisky have been defined for the first time.
These are: single malt Scotch whisky, single grain Scotch whisky, blended malt Scotch whisky, blended grain Scotch whisky and blended Scotch whisky. The regulations also stipulate that the single malt Scotch whisky can be bottled only in Scotland. The use of the term, Pure Malt, has also been banned.
The use of a distillery name as a brand name on any Scotch whisky which has not been wholly distilled in the named distillery has also been banned.
More protection has been given to the five traditional whisky regions of production, which are Highland, Lowland, Speyside, Islay and Campbeltown.
The norms also stipulate that Scotch whisky must be wholly matured in Scotland itself.
Source : Business Line