The Hindu Business Line : Scotch association won't say cheers to Mallya

Edinburgh (Scotland) May 24 Acquisition of Whyte & Mackay, the Scottish spirits company, may not be enough for United Spirits Ltd (USL) to break into the powerful Scotch Whisky Association (SWA).

Mr Gavin Hewitt, CEO of the SWA, told Business Line that USL will have to stop selling some of its brands as Scotch or name them differently if it wants to bag association membership.

"We will consider the company's application only when it conforms to all norms of the association."

Even though Whyte & Mackay was a member of SWA earlier, change in management saw the company lose its membership as per the association's norms.

SWA membership confers several benefits, including automatic IPR protection of brands.

The SWA has said that it will take USL to court if the company tries to sell its popular McDowell's brand in any other country other than India.

In case it does market its brand in another country, it will have to label it as a non-Scotch product.

High duties

The SWA has several times pointed out that its community of Scotch whisky companies has been suffering because it has been unable to develop the significant market potential in India because of high duty structure.

It has said that investigations have shown that India is an important potential market for European wines and spirits.

Additional spirits duty as well as the recently introduced extra additional duty has prevented European Commission producers from realising this potential.

The SWA has said that Scotch whisky and other imported spirits face a range of barriers to India's 100-million-case domestic spirits market. These include basic Customs duty of 150 per cent, additional duty of 25-150 per cent and extra additional duty of four per cent.

Following an European Union appeal, the WTO recently set up a panel to investigate issues concerning India's stand on imported spirits. The panel is expected to give its ruling early next year.

More Stories on : Breweries | Mergers & Acquisitions | Brands

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