Old Monk has announced a loss exceeding Rs 500 crore after the Food Safety and Standards Authority of India (FSSAI) imposed conditions on the sale of the popular rum in Maharashtra. The regulator has insisted that the product must be labelled as “rum-like” instead of the traditional “rum” description. This dispute was brought before the Bombay High Court on Monday, highlighting the ongoing tensions between the manufacturer and the FSSAI.

During court proceedings, Additional Solicitor General Anil Singh, representing the FSSAI, stated that the sales would only be permitted if the manufacturer complied with the proposed labelling revision. Mohan Rocky Springwater Pvt Ltd, the company behind Old Monk, is determined to challenge this stipulation.

Financial Impact and Employment Issues

Advocate Venkatesh Dhond, representing the manufacturer, informed the court that the restrictions imposed on sales from its unit in Thane district have led to significant corporate losses exceeding Rs 500 crore. The effects of this restriction are not limited to the company alone; the Maharashtra excise department is estimated to have lost around Rs 350 crore in revenue. Moreover, approximately 300 employees have reportedly been rendered idle due to this embargo on sales.

Dhond emphasised the inconsistency in the market, noting that Old Monk is still available for purchase in other Indian states, contrasting sharply with its restricted status in Maharashtra. This discrepancy forms a critical part of the manufacturer’s argument against the FSSAI’s prohibition order.

Previous hearings at the High Court had not favoured an immediate interim stay on the ban, prompting the company to seek a more formal resolution through the judicial process.

Attempts to Resolve the Dispute

In a bid to address the concerns raised by the FSSAI, Old Monk’s manufacturer proposed new draft labels that excluded contested age descriptors and ensured a clear indication of “added flavour” in the product. However, these revised labels were reportedly not approved by the regulator, signalling a lack of progress in negotiations between the two parties.

The unyielding stance from the FSSAI has led the company to request the court to assess its case based on its merits. The judges, Chief Justice MC Tripathi and Justice Advait Sethna, have agreed to hear the matter on October 23, providing a timeline for resolution.

The underlying issue in this dispute revolves around the FSSAI’s stance on liquor products that utilise artificial or nature-identical rum flavouring. The regulator has outlined that such additions can mislead consumers regarding the product’s true composition if not labelled accurately. There are also concerns raised about age-related descriptors on Old Monk labels, such as “7 years old blended” and “very old vatted,” which the FSSAI claims do not meet necessary labelling regulations.

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