Diageo has become the latest international spirits giant to face regulatory action in India over product compliance, following similar scrutiny of Pernod Ricard in one of the world’s largest alcohol markets.
India’s food safety regulator has banned the sale of several best-selling whiskies and rums produced by Diageo’s Indian subsidiary, along with products made by local producer Inbrew Beverages, after finding that the companies used artificial flavouring substances rather than relying on traditional ageing methods or naturally derived ingredients to develop the products’ flavour profiles.
The Food Safety and Standards Authority of India (FSSAI) said Indian regulations permit the use of natural flavouring substances in alcoholic beverages. However, regulatory inspections found that some Diageo and Inbrew production facilities had added flavourings associated with the spirits themselves—for example, adding “rum flavour” to rum.
“There is no internationally recognized manufacturing practice whereby rum flavour is added to rum or whisky flavour is added to whisky,” the FSSAI said in a statement released late Sunday.
The regulator argued that such practices could enable producers to bypass traditional maturation processes or reduce their reliance on natural raw materials such as molasses, malt or grapes to achieve the desired flavour profile.
According to Reuters, the FSSAI has ordered a sales ban on several products manufactured by Diageo India, including the popular Antiquity Blue Whisky, Royal Challenge Whisky and McDowell’s No.1 Rum.
Royal Challenge is one of Diageo’s flagship brands in India. According to the brand’s official website, it is blended from Scotch whisky, Indian malt whisky and grain spirits. Diageo says Royal Challenge sells more than 4.5 million nine-litre cases annually in India.
Responding to the regulator’s concerns over its rum products, Diageo’s Indian subsidiary, United Spirits Limited (USL), said in a stock exchange filing that it is engaging with the FSSAI because “this is an industry-wide concern.”
“The product labels in question are in compliance with the current applicable laws and regulations,” the company added.
Diageo also confirmed that it has filed a legal challenge against the FSSAI’s sales ban on its rum products, although it did not disclose further details. A source familiar with the matter told Reuters that the company may also contest the regulatory action affecting its whisky brands.
India Tightens Scrutiny of Spirit Authenticity
India is one of the world’s largest alcoholic beverage markets, with annual sales estimated at around US$40 billion. Diageo is among the country’s leading spirits companies, competing with global rivals including Pernod Ricard across multiple categories.
Despite the regulatory setback, United Spirits recently reported strong financial results. For the first quarter of fiscal year 2026, the company posted a 51.6% year-on-year increase in profit, driven by robust growth in its premium and luxury spirits portfolio. Its “Prestige & Above” segment recorded double-digit growth during the quarter.
The compliance dispute comes as Indian regulators step up enforcement of product authenticity and labelling standards across the spirits industry.
Last month, the FSSAI issued notices to multiple alcohol producers, alleging the improper use of flavourings and misleading age statements, and asked the companies to explain why they should not face further regulatory action. The move is widely seen as part of a broader crackdown on the authenticity and labelling of alcoholic beverages in India, as we have reported.
Under India’s Food Safety and Standards (Alcoholic Beverages) Regulations, 2018, alcoholic beverages may contain approved food additives, enzymes and processing aids permitted under the country’s food standards. However, producers are prohibited from adding flavourings or flavour substances to artificially replicate the natural characteristics of a particular spirit category.
In a statement posted on social media, the FSSAI said the companies involved may have breached the 2018 regulations. If they fail to provide satisfactory explanations, the regulator could initiate further enforcement action under the Food Safety and Standards Act, 2006.
Diageo is among the first major international drinks companies to be publicly named and subjected to product sales bans under India’s latest regulatory campaign on spirit authenticity.
In addition to Diageo’s products, the FSSAI has also prohibited the sale of Inbrew’s Bagpiper Deluxe Whisky and Old Cask Deluxe XXX Rum, as well as three product lines under the iconic Indian rum brand Old Monk.
Neither Inbrew nor Old Monk producer Mohan Rocky Springwater has commented on the sales ban.
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