Indian whisky

A single malt whisky from India. The tropical climate of India makes the traditional aging of whisky in wood barrels a technical challenge.

Distilled alcoholic beverages that are labelled as "whisky" in India are commonly blends based on neutral spirits that are distilled from fermented molasses with only a small portion consisting of traditional malt whisky, usually about 10 to 12 percent.^[1] Outside India, such a drink would more likely be labelled a rum.^[2] Ninety percent of the whisky consumed in India is molasses-based,^[3] although whisky wholly distilled from malt and other grains, is also manufactured and sold.^[4]

Scotch-style whisky is the most popular distilled alcoholic beverage in India. India has traditionally been thought to lack a domestic drinking culture, though locally-produced beverages are popular throughout the country. For instance there are the popular palm-based alcohol and fruit wines of the South, such as arrack, and the fermented rice wines of the North East like sonti. Whisky, however, has become fashionable among affluent Indians.^[1] Brand names of Indian molasses-based whisky, including Bagpiper, McDowell's No.1, Royal Stag, White & Blue Whisky,^[5] and MaQintosh,^[4] suggest that the inspiration behind Indian whiskies is Scotch whisky, despite these products being produced chiefly from molasses.^[6]

History

The drinking of Scotch whisky was introduced to India in the nineteenth century, during the British Raj. In the late 1820s, Edward Dyer moved from England to set up the first brewery in India at Kasauli. The brewery was soon shifted to nearby Solan (close to the British summer capital Shimla), as there was an abundant supply of fresh springwater there. The Kasauli Brewery site was converted to a distillery becoming India's first distillery, which is currently operated by Mohan Meakin. Dyer brought his brewing and distilling equipment from England and Scotland. Some of the original equipment, such as the copper pot stills, is still in use today. Dyer chose the location of the distillery because its climate was similar to that of Scotland, but also added bonus of a market of British troops and civilians in Shimla and Punjab. The Kasauli distillery is the oldest continually used distillery in Asia.^[7]

India produces a large amount of sugarcane, making molasses cheaply available as a by-product of sugar processing. This is used to manufacture most spirits in India, known as Indian Made Foreign Liquor. Indian whisky has generally been made by flavouring and colouring neutral spirits made from molasses, and sometimes blending it with imported Scotch whisky. Production of alcohol from grain was hampered by shortage of extra grain, due to food shortages. Allowing grains to be used for alcohol manufacture is an emotive subject in India, due to poverty and alcohol's ambivalent reputation.^[8]

The manufacture of whisky from malted grains in India was pioneered by Amrut Distilleries. In 1982, Neelakanta Jagdale, Chairman and Managing Director of Amrut Distilleries, decided to create a premium whisky from a combination of malted and unmalted barley,^[9] while most distillers in India were manufacturing whisky by converting molasses to alcohol. Amrut Distilleries began procuring barley from farmers in Haryana,^[9] Punjab and Rajasthan, in addition to molasses,^[10] and launched Prestige Blended Malt Whisky in the Canteen Stores Department in 1986.^[11] The first batch of single malt whisky was ready within 18 months. Because India had no culture of consuming single malts at the time, the company did not consider bottling it as a single malt. Instead, the whisky was blended with alcohol distilled from sugarcane to produce MaQintosh Premium Whisky.^[12] Amrut Distilleries faced difficulties until the 1990s, as most of the technology used for distillation was homegrown due to heavy restrictions in India. According to Neelakanta Jagdale, "The alcoholic beverages industry was not a priority in the country. Although we received help to a certain extent from the Central Food Technological Research Institute (CFTRI), we had to find our own ways to learn about improved distilling methods".^[13]

After liberalization in the 1990s, import duties were reduced moderately, to about 35%, giving distillers access to better technology.^[13] Technology upgradation by plant manufacturers and India's sufficiency in grain production from 2000, gave a boost to grain-based alcohol. Another factor was the entry of foreign players to the market, whose brands seen as more authentic and attractive by affluent Indian consumers. Indian distillers were forced to upgrade to keep up, or risk being relegated to the lower end of the market.^[8] Other factors included volatility in molasses' prices, and the pressure in procuring molasses due to growing demand from other users such as the fuel and chemical industries.^[14] This led several Indian manufacturers to acquire foreign liquor companies.^[8] Under Vijay Mallya's direction, the Indian company United Breweries acquired a number of noted whisky brands and distilleries in Scotland, including Dalmore, Isle of Jura, and Whyte & Mackay.^[15] United Breweries has been increasing production at its Scottish facilities, and has moved to double the production of whisky at Invergordon. Some of the Scotch whisky so produced is used to blend with the Indian molasses whisky.^[5] According to data from Praj Industries, a firm that undertakes turnkey projects for companies in the alcohol business, grain-based lot of all potable alcohol produced in India was at about 10% in 2010, up from 2-3% five years earlier.^[14]

Amrut Distilleries launched Amrut, the first single malt whisky to be made in India, on 24 August 2004.^[16] The production of Amrut single malt whisky was the result of the distillery having malt that was ageing far in excess of what was needed for its medium range Prestige Malt Whisky.^[9] Initially, Amrut aged malt whisky for around a year before blending it. However, due to changing customer preferences, less malt whisky was being added into blended variants. The company had a surplus stock of malt whisky by 1995, and Jagdale decided to allow some barrels to age longer to see how they would turn out.^[11] The whiskies had been ageing for almost four to five years by the year 2000, and the company discovered that hot weather makes whisky mature faster in India than it does in Europe or the United States. The fraction lost to evaporation during aging, known as the angel's share, is also higher in India, at 11-12% per year, than in Scotland, where the annual evaporative loss is about 2%.^[11] Surinder Kumar, the master blender at Amrut Distilleries, has estimated that one year of barrel ageing in India is equal to three years of ageing in Scotland.^[9] John Distilleries had been making blended whisky since its foundation, but decided to manufacture single malt whisky in 2008^[17] in an attempt to enter the premium end of the market. John Distilleries chose to use Indian ingredients in the first bottling, to give the whisky characteristics of its country of origin. The first bottling of Paul John whisky, branded "Paul John Single Cask 161 Whisky", was officially launched on 4 October 2012.^[18] The brand's second release, also in 2012, was "Paul John Single Cask 163 Whisky".^[19] Following the single cask release, Paul John released two single malt whiskies in May 2013.^[20] They were branded Paul John Single Malt Whisky Brilliance and Paul John Single Malt Whisky Edited.^[21]

Domestic market

The Indian whisky market is the third largest in the world, after China and Russia. It has a complex tax structure with taxes leveled by both Central and State Governments. Import taxes are applied by the Central Government on imported spirits. State level taxes are levied by each individual State, with taxation levels and methods varying significantly.^[22] The sale of alcohol is also prohibited in some States. The Indian domestic market was completely closed to all imported spirits until 1 April 2001, under former import licensing restrictions. However, Scotch whisky was widely available through bootleggers and via duty-free allowances. Restrictions were removed in 2001, but an additional customs duty (ACD) was introduced, which raised the cumulative duty burden on imported spirits to between 450% and 700%. This had a significant impact on sales of high-value spirits such as single malts. ACD was removed in 2007, but import duty remains high at 150%,^[23] which makes the market difficult for foreign distillers.

Whisky accounts for nearly 60% of the IMFL market. India accounted for nearly half the global whisky market by volume in 2010.^[22] The market is generally divided info segments based on price.^[24]

Trade controversy

The consumption of native distilled molasses-based whisky in India is encouraged by tariff barriers of up to 150%^[6] that impose a significant markup on imported whiskies in India. Imported Scotch whisky bottled under its own brand names makes up only 1% of the total market share. The substantial tax markup on imported whiskies has been categorized by the Scotch Whisky Association as "pure protectionism".^[5] Indian distillers have political influence, and believe that a cut in import duties would boost Scotch rapidly and would be a "catastrophe" for domestic distillers. The All India Distillers Association also accuses Scotch and other European spirits distillers as having the advantage of agricultural subsidies for their grain.^[6] Indian distillers also accuse the European Union of erecting its own sort of trade barriers by means of rules that forbid the marketing of molasses-based spirits as "whisky". Mallya has objected to the EU's refusal of entry to molasses-based whiskies, claiming that the "imposition of British imperialism is unacceptable".^[5] In a lawsuit brought in India by the Scotch Whisky Association, the Delhi High Court enjoined Indian whisky manufacturers from labelling their product with the words "Scot" or "Scotch".^[25]

India is the world's fifth largest Scotch whisky market by volume (16.42 million litres of pure alcohol) and 19th largest by value (£61.59 million / 532.10 crores)^[26] as of 2012.^[27] Exports of single malt from Scotland have risen by 190% from £268 million to £778 million between 2001 and 2012.^[23]

Manufacturers

Following is a list of whisky producers in India in alphabetical order. The location of the company headquarters is given in brackets.

• Alcobrew Ltd
• Allied Blenders and Distillers Ltd
• Amrut Distilleries (Bangalore, Karnataka)
• Jagatjit Industries
• John Distilleries (Bangalore, Karnataka)
• Khemani Group
• Khoday India Limited (Bangalore, Karnataka)
• Premier Distilleries
• Mohan Meakin (Ghaziabad, Uttar Pradesh)
• N.V. Group
• Radico Khaitan (Rampur, Uttar Pradesh)
• Seagram Manufacturing Ltd, owned by Pernod Ricard
• Shivalik Distilleries (Punjab)
• Som Distillery
• Tilaknagar Industries
• United Spirits Limited (Bangalore, Karnataka)
• Vinbros & Co.

Defunct

The following manufacturers have ceased operations.

• Shaw Wallace (Kolkata, West Bengal) - Merged with United Spirits Ltd

References

External links

• The Anomalies of Drinking in India, Sharad Bailur, Mumbai, India
• India Distillery, Premier Distilleries Pvt. Ltd. India