Set to become cheaper scotch whiskey: Diazio UK Trade Deal Slash Duties to cut prices in India

British liquor company Diazio PLC plans to reduce the scotch whiskey prices in India at a high end of the recently announced Indo-UK Free Trade Agreement. The global leader in Spirits estimate that the FTA implementation will be completed in FY 2027, which will eventually benefit consumers in the world’s largest whiskey market.The veteran company of the UK-based souls said that once the recently signed India-UK FTA is fully implemented, it will directly pass the benefits of low import duties to consumers, benefiting Indian drinkers. Currently, India forms the largest whiskey consumption market and is the largest customer in Diazio by volume and is the second largest than price. Nick Zhangiani, the chief financial officer of Diazio quoted by ET, said, “This (FTA) will take some time to embed in the law. I think it is believed that it will come in the financial year 2027, but we will continue to see it, so it will start flowing. ,FTA influence on scotch whiskeyUnder the terms of the FTA, the UK-made whiskey and on which the tariffs will initially be dropped from 150% to 75%, which will come down by 40% in the next decade. This may lead to a price fall of about 20–22% on some products, although the real impact will depend on several factors including local state taxes and whether companies adjust their pricing strategies accordingly. Scotch whiskey is currently only 4% of India’s total whiskey market, as high import duties have kept it expensive.The sales of Scotch Single Malts in India slowed down in 2024 as the drinking began to move to Indian -made options, but Diazio hopes that the FTA will rule the demand demand. The world’s largest whiskey producing company, which creates Johnny Walker, Tancwere and Smirnoff, expects a high single-shrine fall in consumer prices to make a uniform leap in the volume.Currently, customs are about fifth or 20% of the last retail value of Scotch in India, with the rest of the production cost, marketing and coming from heavy state taxes. However, industry experts have warned that while the FTA opens the door to the new UK whiskey brands and provides more diversity to consumers, this may not lead to equal price reduction in states.“We believe that the consumer value of Scotch can be reduced by at least 20-22%, but it will largely depend on local taxes and how companies work back on their calculations,” ET quoted an industry expert.According to the records of IWSR or international whiskey and souls, shelf prices may decrease by 30%. However, really only 10% can be saved on bio scotch. Many liquor companies are already selling for high taxes at minimal prices. The irony is that states are likely to oppose any price cuts because it would mean losing revenue. “FTA, as far as currently known, does not remove any of the broad red tapes trading in the Indian liquor market,” said Jason Holeway, Senior Research Advisor to IWSR. “Brands and labels will still need to register the state annually by the state, payment with license fee. There are opportunities, but they will not necessarily be easy to reach.”IWSR also highlighted concerns around minimum import pricing and non-tariff barriers. While the risk of hunter pricing or dumping appears low for now, it warns that a price war is “not yet rejected”, especially most players are focused on premiums to promote margin.The industry body stated that it is still not clear whether the two major concerns of the Indian industry have been addressed: to determine the minimum import price per case to prevent dumping and hunter pricing, and removing non-tariff obstacles to support Indian exports.“Initial analysis suggests that the outbreak of hunter pricing or dumping, which will demand response from Indian customs authorities, is unlikely, especially when most players, domestic and imported equally, are premiuming portfolio to maximize the margin.