Scottish Victory?
THE Scotch whisky industry is poised to secure a victory in its long-running battle with the Indian government, which is expected to slash punitive duties on spirits early next month.
Industry sources say India is preparing legislation that will scrap the import duty that subjects all imported spirits to an additional duty of between 25% and 550%.
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The move would mark a significant turning point in the fortunes of Scotch whisky opening up one of the world's largest markets. The Scotch Whisky Association (SWA) has said that it expects to capture a 5% share of the Indian market by 2015 when the tariffs are removed.
Sources say legislation could come in as early as July 1 as ministers look to outflank any ruling made by the World Trade Organisation (WTO) disputes panel. The panel will meet next week to discuss complaints from the US and European Union about high duties on imported whisky.
If the panel rules against India, it will be told to slash its duties or face authorised retaliatory trade sanctions from US and EU member states.
But last night, one source said: "Everybody is now preparing for July 1 and expecting a positive announcement. We have been here before but it appears time has run out. There is a realisation in India that they have to comply with the WTO."
In the past few months, the SWA has made numerous representations to the Indian government, and both the Chancellor Gordon Brown and the Trade Secretary Alistair Darling have raised the issue during recent visits to India.
It is understood that under the new legislation the national duty would be scrapped, allowing individual states in India to set their own levels of taxation in line with the country's WTO commitment.
The move would be welcomed by Vijay Mallya, who last month paid South African entrepreneur Vivian Imerman £595m for Whyte & Mackay.
Mallya's United Breweries Group hopes to sell premium brands such as Isle of Jura, Dalmore, Whyte & Mackay 13-year-old blend and Glayva liqueur through upmarket hotels, which are allowed to import spirits duty free.
According to John Wakely, an independent drinks analyst, Mallya, having bought into the Scotch whisky industry, has to put his weight behind getting the Indian Scotch market to open up.
He said: "There needs to be quite a hurry on this, because unfortunately the flip-side of the Scotch whisky industry is that if there is a sustained boom over a number of years in prices and volume, they start cranking up production."
Despite all the hype surrounding potentially enormous emerging markets in South America and the Far East, they still pale into insignificance compared with that of India. And a snapshot of emerging markets across the world shows that, even with India's exorbitant tariff barriers, the country still buys more Scotch whisky - one million cases in 2004, according to SWA - than either China (700,000 cases), Russia and Poland (600,000 each) or Turkey (200,000).
Source: Scotland On Sunday
Industry sources say India is preparing legislation that will scrap the import duty that subjects all imported spirits to an additional duty of between 25% and 550%.
Advert for the New Scotsman Golf Service
The move would mark a significant turning point in the fortunes of Scotch whisky opening up one of the world's largest markets. The Scotch Whisky Association (SWA) has said that it expects to capture a 5% share of the Indian market by 2015 when the tariffs are removed.
Sources say legislation could come in as early as July 1 as ministers look to outflank any ruling made by the World Trade Organisation (WTO) disputes panel. The panel will meet next week to discuss complaints from the US and European Union about high duties on imported whisky.
If the panel rules against India, it will be told to slash its duties or face authorised retaliatory trade sanctions from US and EU member states.
But last night, one source said: "Everybody is now preparing for July 1 and expecting a positive announcement. We have been here before but it appears time has run out. There is a realisation in India that they have to comply with the WTO."
In the past few months, the SWA has made numerous representations to the Indian government, and both the Chancellor Gordon Brown and the Trade Secretary Alistair Darling have raised the issue during recent visits to India.
It is understood that under the new legislation the national duty would be scrapped, allowing individual states in India to set their own levels of taxation in line with the country's WTO commitment.
The move would be welcomed by Vijay Mallya, who last month paid South African entrepreneur Vivian Imerman £595m for Whyte & Mackay.
Mallya's United Breweries Group hopes to sell premium brands such as Isle of Jura, Dalmore, Whyte & Mackay 13-year-old blend and Glayva liqueur through upmarket hotels, which are allowed to import spirits duty free.
According to John Wakely, an independent drinks analyst, Mallya, having bought into the Scotch whisky industry, has to put his weight behind getting the Indian Scotch market to open up.
He said: "There needs to be quite a hurry on this, because unfortunately the flip-side of the Scotch whisky industry is that if there is a sustained boom over a number of years in prices and volume, they start cranking up production."
Despite all the hype surrounding potentially enormous emerging markets in South America and the Far East, they still pale into insignificance compared with that of India. And a snapshot of emerging markets across the world shows that, even with India's exorbitant tariff barriers, the country still buys more Scotch whisky - one million cases in 2004, according to SWA - than either China (700,000 cases), Russia and Poland (600,000 each) or Turkey (200,000).
Source: Scotland On Sunday
posted by Sattu | 10:58 PM
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