Alcohol companies

Alcohol companies for consideration in EU and UK FTAs

Domestic whiskey makers have suggested a gradual reduction in basic tariffs on alcoholic beverages in India’s proposed trade deals with the EU and UK, as well as a simultaneous removal of non-tariff barriers such as recipe criteria and maturation requirements in these countries.

The Confederation of Indian Alcoholic Beverage Companies (CIABC) has suggested that the Ministry of Trade and Industry gradually reduce tariffs to 50-75% from the current 150% over the next 10 years.

While India reduced the BCD to 50% in the FY22 budget, the government introduced a 100% agricultural infrastructure development tax, leaving the overall tariff level unchanged at 150%.

“We are not against reducing tariffs. We support it and hope that it will be progressive so that companies can prepare themselves ”, declared Vinod Giri, Director General of the CIABC. The industry association counts, among others, the Mohan Meakin and Amrut distilleries among its members.

Talks resumed on the draft trade deal with the EU which had stalled since 2013 as the two sides had yet to smooth out their differences on several issues, including car and alcohol taxes, while New Delhi contacted stakeholders on the India-UK strengthening project. Business partnership.

According to the association, exports to the UK represent just 0.2% of India’s total alcoholic beverage exports, while UK imports represent 24% of total alcoholic beverage imports in India. India.

Giri said non-tariff barriers pose a “huge challenge” for Indian exports to the EU and the UK.

One of those hurdles is the grain-based alcohol requirement, something Indian companies cannot meet as the alcohol here is made from molasses due to the high sugar production.

The CIABC lobbied for Indian whiskeys to be allowed to be sold in the UK as whiskeys, whether made from malt, grain spirits or molasses-based spirits, and a asked for acceptance of Indian recipes in the same way that India accepts British recipes for whiskey. .

The second obstacle concerns the maturation requirement, i.e. the whiskey must have aged for three years.

“However, in hot climates like ours, the evaporative loss is higher. They want it to be clearly stated on the label, ”Giri said, adding that the industry has asked for a quid pro quo in bilateral trade negotiations.

India exported around 73 million cases of alcoholic beverages in FY20, of which only 30,000 cases went to the UK and the EU combined.

Giri said the industry has also sought a minimum import price in order to control the dumping and predatory pricing of whiskey.