State defends ‘Made in Maharashtra’ liquor policy before Bombay High Court; cites 17% revenue surge

The Maharashtra government has defended its new ‘Maharashtra Made Liquor (MML)’ policy before the Bombay High Court, stating that the new regime has led to a nearly 17 percent increase in the excise revenue [International Spirits and Wines Association of India v. State of Maharashtra & Ors.]

The government made the submission in response to a petition challenging the policy.

The plea was filed by International Spirits and Wine Association of India (ISWA), which represents global liquor giants including Pernod Ricard, Diageo and Bacardi.

The grain-based liquor category MML has been classified as a sub-category of Indian made foreign liquor (IMFL) by the State.

It was introduced with a lower-excise duty and capped-retail-pricing to keep it affordable for consumers. Only liquor produced within Maharashtra by licensed manufacturers can qualify as MML.

In its response before the Court, the State excise department said that the policy was aimed at promoting local liquor manufacturers and reviving idle capacities in domestic distilleries.

The excise collections between July and November 2025 rose from ₹9,665.64 crore in 2024–25 to ₹11,299.40 crore in 2025–26 with an increase of ₹1,633.76 crore or about 16.9%, as per the State.

This growth contrasts with the average 12% rise recorded between April and June 2025, before duty revisions and the rollout of MML.

“This shows positive growth after introduction of new policy," the government said.

The government further argued that the policy was aimed at addressing an uneven competitive landscape.

According to State data, around 64% of the total liquor manufactured in 2024–25 came from just nine potable liquor license (PLL) holders, many linked to ISWAI members or their subsidiaries.

The State said these figures justified creation of the MML category and a reserved, incentive-based policy was necessary to revive struggling domestic license holders.

ISWA has challenged the policy as arbitrary and discriminatory, arguing that it violates Article 14 of the Constitution by creating “a preferential class" of PLL holders who alone may manufacture MML, while excluding similarly placed licensees, including its members.

According to the association’s petition, several of its members are potable liquor licence holders manufacturing IMFL in Maharashtra and supplying liquor from other states.

Under the eligibility conditions, only PLL holders whose registered head office is in Maharashtra, with at least 25% of promoters being state residents and no foreign investment, qualify to manufacture MML. Additionally, the brand is required to be produced exclusively within Maharashtra and not in any other state.

ISWA has argued that this criteria defeats the purported objectives of employment generation, investment promotion, full-capacity utilisation of distilleries and enhancement of excise revenue.

As per the petitioner, the same policy goals could be achieved by allowing all PLL holders to produce MML rather than reserving lower taxes and a price brand for a narrow class of locally structured licensees.

However, Maharashtra government has questioned the association’s locus to challenge the policy, pointing out that ISWA itself does not hold any potable liquor license.

While acknowledging that one member, Pernod Ricard India Pvt. Ltd., holds two PLL license holders in Nashik and Kolhapur, the affidavit said that most other members do not operate manufacturing units in Maharashtra.

The State also invoked Section 49 of the Maharashtra Prohibition Act to argue that trade in excisable articles remains the exclusive privilege of the government, which may be conferred only upon license-holders for consideration.

“State government has not imparted this privilege to ISWA, it does not hold the right to bring an action against the policy decision on behalf of the alleged members of the association.”

The Court will hear the case on December 23. On November 24, the Court had allowed the State and other stakeholders to go ahead with preparatory steps for execution of the policy decision, but clarified that the same will be without prejudice to the outcome of the case.

Senior advocate Rohan Shah with advocates Darshan Bora, Chirag Shetty, Anchal Mundada, Kanika Birje, Surabhi Prabhudesai, Vidhi Shah briefed by Economic Laws Practice represent ISWA.

Advocate General Milind Sathe with government pleader Neha Bhide and additional government pleaders Shruti Vyas and GR Raghuwanshi represent the State.

[Read Order]