Legal breakthrough for Scotch in India

25 Feb 2016

India is the world's largest market for spirits, but Scotch still only makes up less than 1% of India's total spirits consumption. That leaves vast potential for growth once issues such as the 150% import tariff on spirits are tackled.

The problem of misleading practices also has to be addressed in India, as in other markets, whereby companies try to take unfair advantage of the success of Scotch.

That's why the industry is toasting a number of legal breakthroughs following recent court success in India to protect Scotland's national drink.

Just two months after we filed court proceedings against three related companies in India - Oasis Distilleries Ltd, Adie Broswon Distillers & Bottlers Pvt Ltd and Malbros International Pvt Ltd - permanent injunctions have been granted against each defendant.

The court has prohibited the defendants from selling whiskies they produce in India with references on their labels to 'Scotch', 'Scotch Whisky' or 'Scotland'.

The companies have also been prohibited from using any words, names, images or devices evocative of Scotland or Scotch Whisky unless the product is genuine Scotch Whisky.

Legal firsts

This court decision represents a number of legal 'firsts' that we have welcomed.

This was the first action we raised using measures in the Spirit Drinks Verification Scheme.

The scheme was launched in January 2014 to give consumers of Scotch Whisky around the world even greater reassurance that what they are buying is the genuine article. It ensures that every part of the Scotch Whisky supply chain, from distiller to bottler, across the globe, is mapped by the industry and registered with the UK Government to ensure it complies fully with all production and bottling rules. Bottlers outside Scotland wanting to use Scotch Whisky as a constituent in a local spirit also need to be verified under the scheme.

It was also the first action we took under new Commercial Court rules in India. These rules were introduced at the end of 2015 and are designed to resolve court actions promptly and efficiently.

The proceedings related to three "whiskies", Royal Arms, Blue Patrol and Malbros, all referring to Scotch Whisky on their labelling.

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. 

We said that the absence of verification suggested there was no Scotch Whisky in the products, meaning they infringed the SWA's registration of 'Scotch Whisky' in India as a geographical indication (GI).

We also argued that the "additional protection" granted to Scotch Whisky under the Indian GI Act meant no reference could be made to Scotch Whisky in the labelling or advertising of a whisky produced in India, even if it contained some Scotch.

Finally, we said that the labelling, packaging and advertising of these products was misleading and this infringed the registered GI, 'Scotch Whisky', and amounted to 'passing off'.

Such decisions can only be good for Scotch in India, and for consumers. Let's raise a dram to that.

Kenneth Gray is senior legal counsel at the Scotch Whisky Association.