AlcBev In Five

The daily five-minute brief on the beer, wine and spirits business.

Daily brief · 5 min
0:00 / 2:53

The day's stories

01

India probes Pernod, Diageo Scotch import classification

Reuters reports Indian tax officials are examining whether bulk Scotch was misclassified to pay lower duties — an early test of how the India-UK trade pact's tariff tiers are policed.

Indian tax officials are investigating whether Pernod Ricard and Diageo wrongly classified some bulk Scotch imports, allowing them to pay lower tariffs, Reuters reported on October 19, citing unnamed sources. The inquiry centres on how bulk Scotch is classified for duty purposes under the tariff tiers set by the India-UK trade pact, according to the report. Neither company has confirmed the inquiry, and the sources are not named, so the scope and status remain unverified. Both are the largest Scotch importers into India and are expanding there, which makes the classification question consequential beyond the two firms, per Reuters.

Also moving today

Read the transcript
Welcome in, today is Tuesday, October twentieth, and we begin with Reuters, and a tax inquiry into how bulk Scotch enters India. Following our earlier report on Scotch shelf prices falling in India after the India and UK trade pact, the duty tier behind those cuts is now under scrutiny. Reuters reports Indian tax officials are investigating whether Pernod Ricard and Diageo wrongly classified some bulk Scotch imports, paying the pact's lower tariff. That account cites five industry sources, and Reuters says it is first to report the details. Under the pact, effective July fifteenth, India cut duty on certain Scotch imports to seventy-five percent, from one hundred fifty. Per that reporting, inspectors argue the relief does not cover bulk concentrates, which both companies import to blend into brands like Royal Stag, Blenders Pride and McDowell's. If that reading holds, it removes the benefit from the main channel by which Scotch actually reaches Indian bottling lines. The same reporting says inspectors made an unannounced visit to Pernod's India headquarters near New Delhi last week, and questioned executives about Scotch imports. Diageo's Indian unit, United Spirits, said in a stock exchange filing that offices in multiple locations were searched on Friday, part of what it called an industry-wide exercise. Pernod told Reuters it is cooperating with the Directorate of Revenue Intelligence and providing all information requested. Diageo said it is cooperating with Indian authorities and has always complied with local laws. India's revenue directorate did not respond to a request for comment. That same account notes the UK supplies almost seventy-five percent of India's imported spirits market, citing Crisil Ratings, and that Pernod already faces a three hundred fourteen million dollar back-tax demand over alleged undervaluation, which it denies. Now, a few more headlines moving the trade today. Just Drinks reports Proximo Spirits has paused distillery operations at its Great Jones Distilling site in New York City. Brewbound reports Circana expects the vodka and ade segment, also sold as hard sports drinks, to reach up to half a billion dollars in sales in twenty twenty-seven, per its beverage alcohol lead Scott Scanlon. Harpers reports Italy's twenty twenty-six vintage was marked by intense heat and prolonged dry periods, with vineyard management proving crucial to preserving freshness, per initial winery assessments. And finally, Just Drinks reports Amber Latvijas Balzams has applied to terminate its legal protection proceedings after creditors rejected a restructuring plan.