Old Monk sale ban has cost Maharashtra ₹350 crore in revenue: Company tells Bombay High Court

The Maharashtra State Excise Department has lot approximately ₹350 crore in revenue due to the ongoing sales restraint on Old Monk rum, the rum's manufacturer Mohan Rocky Springwater Pvt. Ltd. informed the Bombay High Court on Monday [Mohan Rocky Springwater Pvt Ltd v. Union of India & Ors.].

The submission was made before a division bench of Chief Justice Mahesh Chandra Tripathi and Justice Advait Sethna during proceedings challenging a prohibition order by the Food Safety and Standards Authority of India (FSSAI).

Senior Advocate Venkatesh Dhond, appearing for the manufacturer, pointed out that the restraint on sale from its Thane district unit has resulted in over ₹500 crore loss to the company.

“The excise has also lost around ₹350 crores in revenue,” the lawyer said. 

He highlighted that the other units in Maharashtra continued selling the exact same rum formulation. 

In response, Additional Solicitor General Anil Singh reiterated that authorities would permit sales if the company agrees to modify its labeling to describe the product as 'rum-like' instead of 'rum'. 

The dispute stemmed from an FSSAI directive prohibiting sales of popular liquor products that add external rum flavours to spirits sold under standard product names.

FSSAI claimed that incorporating artificial or nature-identical rum flavoring masks a spirit's natural compositions. It makes the product sub-standard and misleads consumers unless the product is labeled as a flavoured product or spirit with rum flavour.

FSSAI’ decided to halt Old Monk sales over the labels as well as misleading ageing descriptors, such as '7 years old blended' and 'very old vatted'.

The company argued that regulations permit neutral spirits with approved additives, claiming competitors use identical processes without facing similar bans.

The High Court had earlier declined an immediate interim stay on the prohibition. 

To resolve the deadlock, the manufacturer previously agreed to submit revised draft labels without the disputed age descriptors and prominently declaring 'added flavor'. 

However, when FSSAI did not approve the label, Old Monk asked the court to hear the matter on merits. 

The Court will hear the matter next on October 23.