Whisky industry woos India on tax

THE Scotch whisky industry will this week press its case for fairer access to what could develop into its biggest market during a high ranking visit to India.

A delegation led by Gavin Hewitt, chief executive of the Scotch Whisky Association, will meet senior government officials and industry representatives as preparations begin for the next summit meeting in February to discuss an India-Europe free trade agreement.

A key objective of the visit is to discuss the issue of the 150 per cent tariff on imported spirits in India. Although the tariff has been reduced from 750 per cent in 2001, Hewitt said the current level still meant Scotch whisky was unaffordable for most.

“We now have a situation where the tariff means a £10 bottle of Scotch whisky becomes a £25 bottle before it enters distribution. There is a huge demand for Scotch whisky from India’s emerging middle class and it could be one of our biggest markets if we were given fairer access – it is the biggest international trade priority for the industry currently.”

Some 250 million cases of spirits are sold in India each year, of which 140 million cases are whisky – the highest number in the world – but only 1.5 million cases of that is genuine Scotch whisky.

Hewitt said the tariff on imported spirits was much higher than in other emerging markets such as China (10 per cent) and Brazil (20 per cent).

Earlier this year, the industry hailed a deal to provide stronger legal protection for Scotch whisky amid an ongoing fight against counterfeiting.

Only spirits produced in Scotland can now use “Scotch whisky” on their labels, and as part of next week’s visit an industry seminar will be held to highlight the restrictions under the regulations.

The long-awaited protection – following a Scotch Whisky Association application – was the first specific legislation on the subcontinent to deal with whisky. Scotch whisky exports powered through global economic uncertainties in the first half of this year, driving up exports 22 per cent to £1.8 billion. The US remained the top export market by value, with shipments up 14 per cent to £268m.