Diageo to Reformulate Whisky, Rum Brands in India After FSSAI Flavouring Breach

Diageo is changing the formulation of some of its popular whisky and rum brands in India after FSSAI flagged concerns over flavouring practices. Here’s what’s changing, which brands are affected, and what it means for United Spirits.

Diageo’s Whisky Just Got a Recipe Change

Diageo has agreed to reformulate certain whisky and rum products in India after the Food Safety and Standards Authority of India (FSSAI) raised concerns over the use of flavouring substances, Reuters reported, citing two government sources.

The move could affect popular brands including Royal Challenge, Antiquity Blue and McDowell’s No. 1 Celebration Matured XXX Rum.

The company has agreed to remove the disputed flavour additives from the affected products.

Which Diageo Brands Are in the Spotlight?

Three well-known names are at the centre of the regulatory action:

• Royal Challenge Whisky
• Antiquity Blue Whisky
• McDowell’s No. 1 Celebration Matured XXX Rum

Royal Challenge is particularly significant for Diageo's India business, with the company selling more than 4.5 million nine-litre cases annually in India, according to Reuters.

So, What Exactly Did FSSAI Flag?

The issue centres on the use of whisky flavouring in whisky and rum flavouring in rum.

FSSAI questioned whether such flavouring practices were consistent with the regulatory requirements for these alcoholic beverages.

And this isn't just a local recipe tweak.

The reformulation will apply to the affected brands manufactured across India, rather than only to products sold in states where restrictions were imposed.

Until the new formulations are rolled out, Diageo has also agreed to provide clearer information about added flavouring on the front of product packaging.

From Regulatory Dispute to Reformulation

The flavouring issue has already triggered regulatory action in some states.

Diageo's India business, United Spirits, has maintained that its products comply with applicable regulations and has challenged the rum-related restriction in court.

The latest agreement to reformulate could therefore help the company address the regulator's concerns while keeping its brands in the market.

What Does This Mean for United Spirits Investors?

With Diageo’s reformulation, the effect will be visible in the stock market as well.

Since the affected products are part of United Spirits' brand portfolio, it is worth watching whether the reformulation affects sales, production costs, margins, or consumer demand.

There is no disclosed estimate of a financial impact at this stage, so it would be premature to attach a specific earnings impact to the development.

For now, the key variables are how quickly the new formulations reach shelves and how regulators respond.