The Bombay High Court is set to review a plea from several prominent liquor manufacturers who are contesting prohibitory orders enacted by the Food Safety and Standards Authority of India (FSSAI). The hearing, scheduled for August 10, will address the grievances of companies like United Spirits and Mohan Meakin, known for their popular brands McDowell’s No.1 and Old Monk, respectively. These companies have found themselves at odds with FSSAI regulations that have paused the sale of their Indian-Made Foreign Liquor (IMFL) since June.
The FSSAI’s decision was based on allegations of misleading labeling practices and unauthorized flavor additions in the liquors. This led the manufacturers to seek judicial intervention. The hearing, presided over by Acting Chief Justice Ravindra Ghuge and Justice Gautam Ankhad, acknowledged the significant disruption that a sudden industry-wide shutdown could cause. Given the potential widespread impact of any decision, the bench emphasized the need for the Additional Solicitor General (ASG) Anil Singh to provide further instructions from the FSSAI.
Legal Arguments and Industry Impact
During the proceedings, Senior Advocate Birendra Saraf, representing United Spirits, highlighted the severe implications of the FSSAI’s abrupt prohibitory orders, which he claimed threatened to halt approximately 30% of the IMFL industry. Saraf explained that the production of IMFL rum traditionally involves blending a matured rum concentrate with a neutral spirit, a practice that has persisted for over fifty years.
Saraf criticized the regulatory body for suddenly enforcing new standards without sufficient notice, pointing out that the process of adding flavors to enhance the product’s taste profile has been longstanding. He argued that prohibiting the use of rum flavor in rum, while allowing other flavors like orange or lime, was inconsistent. The FSSAI has insisted that products with additional flavors should be labeled clearly as such, suggesting terms like “Rum Flavored Spirit” instead of simply “rum.”
Regulatory Compliance and Challenges
The FSSAI raised concerns about labeling discrepancies, particularly labels claiming that spirits were “matured in cask” when the majority component was a neutral, unmatured spirit. The FSSAI’s regulations require that any age claims accurately reflect the youngest spirit in the blend.
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The High Court explored the possibility of addressing the FSSAI’s concerns through modified labeling. Saraf countered that relabeling was not a simple task due to the necessity for state-level regulatory approvals, which cannot be achieved overnight.
In defense of its position, FSSAI’s counsel argued that the regulatory actions were intended to ensure proper labeling standards and to prevent consumer deception. They asserted that their primary concern was the correct use of labels and that compliance with labeling standards would resolve the issue.
FSSAI also reiterated that no international standard supports the addition of external rum flavor to standard spirits like rum or whisky to simulate aging, considering such practices misleading to consumers.
