Home » FSS ACT » Black Label caught in red tape, no takers at liquor auctions

Black Label caught in red tape, no takers at liquor auctions

Liquor distributors said Foods Safety and Standards Authority of India (FSSAI) red tape and unclear Customs norms on liquor auctions are the main reasons why they are staying away.
Over the last 18 months, the Customs department has tried to auction over two lakh bottles of imported liquor worth about Rs 100 crore, abandoned at its bonded warehouses across the country. But it has found no takers.
On December 7, cases of Talisker, Glenmorangie, Laphroaig, Moet & Chandon and other imported liquor brands once again failed to find bidders at an e-auction organised by the Mumbai Customs, said officials.
“This was the fourth unsuccessful auction by Customs in the last one year,” said a Customs official who did not want to be named. Similar auctions in other parts of the country in the last two years have also been unsuccessful.
Liquor distributors said Foods Safety and Standards Authority of India (FSSAI) red tape and unclear Customs norms on liquor auctions are the main reasons why they are staying away. According to sources, imported liquor put up for auction is not cleared by FSSAI, and hence requires its no objection certificate (NOC).
“The major bone of contention between the Customs and distributors is who should get the NOC from FSSAI for the imported liquor that is being auctioned. Should it be the Customs, which is the custodian of the liquor stock, or the bidding company which will eventually distribute it. Customs has to clear the air on this,” said another official involved in the auction process.
Under existing norms, FSSAI gives an NOC when an imported food item conforms to its labelling requirements and passes its lab test. According to an FSSAI official, who spoke on condition of anonymity, the labels of the liquor bottles should have details of the ingredients. But in most countries, liquor is exempted from ingredient-labelling requirements.
While the labelling requirement existed since 2011, it was only in 2013 that the FSSAI started enforcing it. Since then, the Customs has impounded huge stocks of liquor which were not labelled correctly.
The liquor cases at the warehouses were imported by distributors in 2013-14 or earlier. Under Customs rules, duty is collected at the time of clearance from the warehouse. Imported goods are allowed to remain in the warehouse for up to a year, without incurring any interest liability. If the importer does not clear the duty within a year, it becomes the property of Customs and the department can auction the goods to recover duty.
One reason why the liquor stocks were abandoned at the bonded warehouses could be because they weren’t meeting labelling norms, said the FSSAI official. That’s perhaps why distributors aren’t even picking up the bottles, even if they are available at a cheaper rate. “Getting FSSAI NOC is a big task. There is no guarantee that the FSSAI will approve a particular imported food product even if it is used widely in other parts of the world which have stricter regulations. Our past experiences with the FSSAI have been bad. It has created a trust deficit. So nobody wants to participate in an uncleared liquor auction,” said a distributor.
According to the FSSAI official, the Customs should seek its clearance before an auction. “No unsafe food should enter the country,” he said. But the department has not sought clearance so far, he added.

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