India investigates Diageo and Pernod Ricard over Scotch tariffs

Indian tax authorities are investigating liquor giants Diageo and Pernod Ricard regarding the classification of bulk Scotch imports. The Directorate of Revenue Intelligence has conducted searches of offices and questioned executives to determine if companies are misclassifying bulk Scotch concentrates to improperly benefit from reduced tariffs.

The dispute centers on the India-UK trade agreement implemented on July 15, which reduced import duties on certain Scotch products from 150% to 75%. While the agreement provides for these concessions, Indian investigators suggest the reduced rates may not apply to bulk concentrates used for blending.

The International Spirits and Wines Association of India has stated that excluding bulk Scotch from these provisions may undermine market-access benefits negotiated in the bilateral pact. Both Diageo and Pernod Ricard have stated they are cooperating with authorities and maintain that they comply with local laws.