VIJAY Mallya, the Indian drinks tycoon, has accused the Scotch Whisky Association of being "paranoid" about India and warned that it could undermine the prospects for Scotch in the world's biggest market unless it halts its "heavy handed" battle over tax.
Billionaire Mallya, who this week will deliver a speech in Glasgow on the Indian market, has called on the organisation to curtail its "aggressive approach" and begin a process of "constructive dialogue".
However, his comments have further aggrava
ted the SWA, which last night said that after two decades of negotiations with India tariffs remained stubbornly high.
Mallya, speaking ahead of the World Whiskies Conference in Glasgow, said Indian spirits manufacturers had always welcomed the Scotch whisky industry into the subcontinent, but in its "fierce enthusiasm to protect Scotch whisky" the SWA was in danger of losing sight of the goodwill that exists.
In an interview with Scotland on Sunday he said: "The Scotch Whisky Association has adopted a rather aggressive approach and in the past has crossed swords with the Indian spirits manufacturers. In my advice to the Scotch Whisky Association I have always encouraged a process of dialogue. I believe that the SWA and the Confederation of Indian Alcoholic Beverage Companies could achieve a lot together by a process of dialogue rather than through a process of confrontation."
Whisky accounts for most of the 100 million cases of spirits consumed each year in India. But high taxes mean that Scotch has captured less than 1% of the market. Last June, India slashed taxes on imported spirits from 550% to 150% in response to pressure from the World Trade Organisation and SWA, but since then a number of individual states have proposed their own tariffs.
Mallya now controls around 60% of the Indian whisky market following his £595m acquisition of Whyte & Mackay.
Last night, Campbell Evans, director of government affairs at the SWA, refuted Mallya's claims that the association was paranoid, insisting trade reform was a global issue.
He said: "We have been doing this for two decades and the tariffs remain at 150%. In China they are 10%, in Japan, Canada and USA they are zero, so India is out of line with the rest of the world. We are not targeting India – they are being tardy.
"I agree with Vijay Mallya that we want to do this through negotiation because it is in the interests of everybody to do so. But the problem is we have heard for too long from governments that reform is coming and reform has never come."
John Wakely, a drinks analyst, said: "I can't understand why the SWA continues to be antagonistic to a market that is potentially the biggest whisky market in the world by a mile."
The full article contains 461 words and appears in Scotland On Sunday newspaper.
