Maharashtra Loses ₹350 Crore Due to Old Monk Sales Ban, Court Hears
The Bombay High Court is addressing the significant revenue loss faced by Maharashtra from the sales restriction on Old Monk rum.
Maharashtra's excise department reports a ₹350 crore loss in revenue due to the Old Monk sales ban.
The manufacturer claims over ₹500 crore in losses from its Thane unit amid ongoing legal disputes.
The court is set to review the case further on October 23.
The Bombay High Court is currently examining a case regarding the sales ban on Old Monk rum, which has reportedly cost Maharashtra ₹350 crore in revenue. This information was presented by Mohan Rocky Springwater Pvt. Ltd., the manufacturer of Old Monk, during a hearing on Monday. The case arises from a prohibition order issued by the Food Safety and Standards Authority of India (FSSAI) that has restricted sales from the company's Thane district unit.
Senior Advocate Venkatesh Dhond, representing the rum manufacturer, emphasized the financial impact of the sales restraint, stating that the company has incurred losses exceeding ₹500 crore. He pointed out that while the Thane unit is affected, other units in Maharashtra continue to sell the same rum formulation without restrictions. This inconsistency has raised questions about the fairness of the FSSAI's directive.
In response to the ongoing legal proceedings, Additional Solicitor General Anil Singh indicated that the sales ban could be lifted if the manufacturer agrees to alter its labeling to describe the product as 'rum-like' rather than simply 'rum.' This directive stems from FSSAI's concerns that the addition of artificial or nature-identical rum flavoring could mislead consumers regarding the product's authenticity and quality.
The FSSAI's prohibition was based on the claim that such flavoring masks the natural characteristics of the spirit, leading to a sub-standard product unless labeled correctly. The authority also took issue with certain aging descriptors used by the company, such as '7 years old blended' and 'very old vatted.' The manufacturer contends that existing regulations allow for neutral spirits with approved additives, arguing that competitors are not facing similar restrictions despite using comparable processes.
The High Court previously declined to grant an immediate stay on the prohibition, prompting the manufacturer to propose revised labels that omit the contested age descriptors and clearly state 'added flavor.' However, as the FSSAI did not approve these labels, Old Monk has requested the court to evaluate the matter based on its merits. The next hearing is scheduled for October 23, where the court will further deliberate on the case.
