Why the FSSAI is also putting liquor under the scanner

## The Jurisdictional Tug-of-War Over Fermented Liquids

For decades, the regulation of alcoholic beverages in India has remained the exclusive domain of state excise departments. These state-level apparatuses function primarily through a fiscal lens, viewing spirituous liquids, wines, and beers as cash cows capable of generating substantial state revenue through exorbitant duties, license fees, and movement permits. However, this revenue-centric paradigm is undergoing a quiet, consequential challenge. The Food Safety and Standards Authority of India (FSSAI) is increasingly casting its regulatory net over the alcoholic beverage sector, raising complex questions about product standardization, chemical safety, and consumer health.

At the heart of this regulatory friction lies a fundamental statutory paradox. Under the Food Safety and Standards Act of 2006, alcoholic beverages are legally classified as food products. This statutory inclusion places spirituous products under the purview of federal food safety norms, despite the parallel, entrenched jurisdiction of state excise laws governed by constitutional entries in the Seventh Schedule. The friction is no longer merely theoretical. Federal food safety regulators are asserting authority over ingredient transparency, contaminant limits, labeling requirements, and the standardization of manufacturing processes, creating an environment of dual compliance for distillers and brewers across the country.

## Navigating Standardization and Chemical Safety

The Indian domestic liquor industry, characterized by a complex mix of traditional country liquor, Indian-Made Foreign Liquor (IMFL), and craft brewing, has historically operated under fragmented state-specific standards. Quality control has varied widely from one state jurisdiction to another, leading to persistent vulnerabilities regarding industrial contamination, heavy metals, and methanol poisoning. The intervention of the FSSAI seeks to replace this patchwork of state rules with unified, science-based safety benchmarks that align with Codex Alimentarius guidelines.

Implementing these uniform federal standards, however, disrupts long-standing commercial practices within the domestic market. Standardizing labelling mandates—such as mandatory disclosures of nutritional information, warning labels, and precise ingredient listings—imposes significant compliance costs on manufacturers. Smaller regional distilleries and traditional country liquor producers face severe economic hurdles in upgrading their laboratory testing infrastructure to meet federal microbiological and chemical parameters. The cost of compliance threatens to accelerate consolidation within the sector, potentially marginalizing regional players who lack the capital reserves required for rigorous federal validation.

## The Economic and Federal Implications

Beyond technical compliance, this regulatory encroachment triggers federal sensitivities. State governments rely heavily on excise revenue, which often constitutes a vital fiscal cushion for balancing state budgets. Any federal measure that inadvertently slows down manufacturing output, curtails distribution, or increases compliance costs directly threatens state exchequers. State excise commissioners have historically guarded their turf jealously, viewing central food safety oversight as an intrusion into their fiscal sovereignty and administrative autonomy.

Industry stakeholders find themselves navigating a treacherous maze of overlapping mandates. A distillery must satisfy the strictures of the local excise inspectorate regarding production quotas, storage bonds, and movement tracking, while simultaneously satisfying federal food safety auditors regarding hygiene, packaging integrity, and compositional standards. Resolving this institutional duality requires a coordinated framework that harmonizes revenue collection with public health protection, ensuring that food safety mandates do not inadvertently paralyze commercial operations or spawn bureaucratic extortion.

## Toward a Cohesive Regulatory Architecture

The path forward necessitates a formal demarcation of responsibilities between state excise departments and the FSSAI. While state authorities must retain their mandate over taxation, licensing, and distribution logistics, technical safety, chemical purity, and consumer labeling must fall under standardized federal oversight. Achieving this balance is essential for safeguarding public health without stifling an industry that contributes significantly to agricultural supply chains and manufacturing output. Without such a compact, the ongoing regulatory overlap risks transforming consumer protection into an administrative bottleneck.