India comes in from the cold

02 February, 2018

Indian whisky producers are becoming increasingly confident as drinkers recognise the spirits for their quality. now, says Dominic Roskrow, they’re set to take the next step up.

_________________________________________

ANYONE WITH ANY misgivings about the UK’s decision to leave the European Union should have been highly alarmed by foreign secretary Boris Johnson’s comments about whisky trade with India from a few months back.

Not only did he offend an entire religion by waving scotch whisky bottles around in a Sikh temple, but what he said was, to use language that he would understand, a load of old piffle and balderdash.

The gist of what Johnson had to say was that once the UK was free of Europe, it would be free to do a deal with India to sell lots of whisky there. Leaving to one side the fact that the first thing India is likely to want is more travel visas to the UK for its citizens –pure anathema to the Brexiteers – he revealed he had absolutely no understanding of India and whisky whatsoever. The facts are these:

The European Union has had scores of negotiators fighting the scotch whisky cause, and others, since 2007. Without any success. Talks stalled in 2013 ‘due to a mismatch of the level of ambitions’. They resumed in 2016 but no real progress has been made. At the EU-India Summit of October 6, 2017 the leaders: “Expressed their shared commitment to strengthening the Economic Partnership between India and the EU and noted the ongoing efforts of both sides to re-engage actively towards timely relaunching negotiations for a comprehensive and mutually beneficial FTA (Free Trade Agreement).”

You don’t negotiate with India. You negotiate with 29 separate States. Foreign whisk(e)y brands have struggled to capture the market due to a complicated federal tax structure, high import duties and policies favouring domestic producers. The tariffs imposed on Europe are partly due to the fact that much of what the Indians call ‘whisky’ is not recognised as such by Europe because it is made with molasses. Messing with the definition in any post-Brexit scenario would be akin to importing chlorine-cleaned meat from America.

India is a vast market – there are 1.34bn people – but three quarters of that number, about 1bn, are living in poverty, are not necessarily benefitting from economic growth and would not be able to afford scotch, even without tariffs and taxes

India already has ‘whisky’. A lot of it. Indeed, it has the biggest brands in the world, most with a long history of marketing and advertising support, and many with a huge and loyal pool of drinkers. It is hard to track reliable statistics for the size of the total spirits market in India but United Spirits estimates it at approximately 270m cases, approximately 33m of which are its Officer’s Choice brand. The Scotch Whisky Association estimates the Indian spirits market at 250m 9-litre cases, of which 140m are ‘whisky’. India remains the world’s largest consumer of ‘whisky’, an industry worth about $10bn. Does Mr Johnson really think there is a huge group of people just waiting for new scotch brands to enter the market?





Comment

David Williams

Securing french wines’ future?

When people make predictions about the next big grape variety, what they’re usually trying to anticipate is the next big switch in consumer taste.

Click for more »

Events

Facebook

Twitter