India has emerged as one of the world's fastest growing Scotch whisky import markets. So much so that post-Brexit UK will be looking to connoissuers in India to make up for any drop in sales in Europe as a result of an end to free trade deals within the European Union (EU). The Scotch Whisky Association (SWA) revealed in its recent analysis that the amount of Scotch whisky sold overseas increased for the first time since 2013, largely thanks to India registering a massive jump in shipment value. It is a confirmation that will come as less of surprise to whisky lovers in India. According to the latest 2016 statistics, India has established itself as the third-biggest export market for Scotch at 41 million bottles, marking a 41 per cent increase in sales volumes, after France and the US. “The growth of exports to India stood out, with value up 28 per cent to 43 million pounds,” the SWA said. The industry body also called on urgent action from the UK government to help realise the full potential of the Indian market. “The full potential of the Indian market would only be delivered through liberalisation of the exorbitant 150 per cent basic customs duty. We urge the UK government to prioritise discussions with India as it develops its post-Brexit priorities,” it adds. Diageo, a leading UK-headquartered distilling company, recently took over Indian liquor baron Vijay Mallya's United Spirits distribution network in India, which is being linked to the sale of 12 million more bottles than last year. Most of that was in bulk, for bottling in India, or blending with Indian whiskies. However, India also registered a marked rise, by more than half, in the amount of single malt whisky shipped to India, adding up to more than 700,000 bottles. Scotch, a patent of the Scotland, overall had the equivalent of 533 million bottles shipped from the UK in the first six months of 2016, marking a 3.1 per cent increase. SWA attributes this to an “industry-wide emphasis on craftsmanship and provenance, backed by investment". However, Scotch makers are concerned about the impact Britain's vote to leave the European Union (EU) could have on the whisky. "The first half of 2016 was marked by an improving Scotch whisky export performance, suggesting a strengthening in global consumer demand compared to the last couple of years... It is clear, however, that the uncertainties of the Brexit vote will create challenges for exporters and we continue to encourage early clarity on the likely shape of the UK′s future trading relationship with the EU and other countries,” said David Frost, chief executive of SWA.
He adds@ “Brexit poses challenges and uncertainty but also brings opportunities if the UK can secure favourable bilateral trade deals with key export markets... EU talks with India have proved challenging for a decade now and we hope the UK will now take a fresh approach to securing an ambitious trade agreement. “The UK should be a voice for open markets globally. The more open the market, the more Scotch Whisky exports will grow to the benefit of the wider economy.” Scotch is a specific term used for whisky made from malted barley through a legally defined process, originating in Scotland. Any bottlers outside Scotland who want to use Scotch whisky as a constituent in a local spirit must first apply for the verification process. Earlier this year, India had ruled against the use of the term “Scotch” and “Scotland” by Indian spirits firms. The trade body, with a base in Edinburgh and London and set up to advance the global interests of Scotch whisky, had filed court proceedings against Oasis Distilleries Ltd, Adie Broswon Distillers & Bottlers Pvt Ltd and Malbros International Pvt Ltd in India last December. India's Commercial Court granted three permanent injunctions against each company prohibiting them from referencing Scotch or Scotland on any of their products. The products in question were Royal Arms, Blue Patrol and Malbros. In a statement, SWA's Kenneth Gray said: “The industry is toasting a number of legal breakthroughs following recent court success in India to protect Scotland's national drink. “This court decision represents a number of legal 'firsts' that we have welcomed. This was the first action we raised using the Spirit Drinks Verification Scheme. It was also the first action we took under new Commercial Court rules in India.” India is one of the world's largest spirits market but an extremely high 150 per cent import tariff means Scotch still only comprises less than 1 per cent of the country's total spirits consumption. The Spirit Drinks Verification Scheme came into effect in January 2014 to give Scotch whisky consumers around the world assurance of authenticity. Gray added: “None of the three companies described as the bottlers of these brands were listed under the Verification Scheme. We argued that this indicated that since at least 10 January 2015 the defendants could not have been supplied with bulk Scotch whisky for blending and bottling. “But by September 2015 all three products were still advertised on an Oasis Group website with marketing, labelling and packaging referring to Scotch Whisky.” The SWA had argued that the lack of verification suggested there was no Scotch in any of the products and so the companies were in breach of Scotch Whisky's geographical indication (GI) in India. The association had also claimed that such labelling, packaging and advertising was “misleading” and “infringed” the registered Scotch Whisky GI. Scotch whisky has “additional protection” under the Indian GI Act, which means even products that do contain some Scotch cannot reference the spirit on labels or in adverts for a whisky made in India. Scotch is a specific term used for whisky made from malted barley through a legally defined process, originating in Scotland. Any bottlers outside Scotland who want to use Scotch whisky as a constituent in a local spirit must first apply for the verification process. “Such decisions can only be good for Scotch in India and for consumers. Let's raise a dram to that,” Gray concluded.