NEWS
GLOBAL DRINKS GIANTS SUED MAHARASHTRA STATE OVER DISCRIMINATIVE TAX SCHEME
By Staff Reporter
2-12-2025
Source: Unsplash
Global drinks giants including Diageo and Pernod Ricard have sued India’s Maharashtra state over a sharp tax hike on their affordable brands and for excluding the companies from a new lower tax category reserved for some local firms.
Maharashtra accounts for 7 percent of India's premium liquor consumption and is home to big Diageo and Pernod Ricard factories.
The financial hub Mumbai there is a key market for companies aiming to target an affluent urban population.
Between June and August, the state introduced a new policy to boost local investments by creating a category called "Maharashtra Made Liquor", distillers headquartered in the state but without any foreign investors are now charged a booze tax of 270 percent.
Taxes were raised to 450 percent from 300 percent on other premium brands in the affordable segment, which have a cost of production below INR260 (USD3) a litre.
Affected brands include Diageo's McDowell's, which it says is India's largest selling whisky brand, Pernod's Royal Stag, Tilaknagar Industries' Imperial Blue and Allied Blenders and Distillers' Officer's Choice.
The International Spirits and Wines Association of India (ISWAI) has said the policy creates trade barriers, asking judges to quash it, or let companies with foreign investment participate in the lower-tax system, according to its 14 November filing, which is not public but was reviewed by Reuters news agency.
ISWAI's lawsuit says "the state has sought to grant an artificial competitive advantage to the preferred class".
The Maharashtra government did not respond to Reuters queries. It has publicly said the new policies will help in job creation, new investments, raise the operating capacity of existing factories and help garner USD1.56 billion a year in additional revenues.
Diageo's Indian unit, United Spirits, said in a statement Maharashtra is a key market and it hopes to have a level playing field. ISWAI, Pernod, Tilaknagar and Allied Blenders did not respond to Reuters queries.
(the writer can be contacted at: info@thewinechronicle.com)
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