Whalesbook
Challenging the 'Made Liquor' Policy
The companies argue that the government resolution's eligibility rules for MML manufacturing are overly strict and block competition. They claim these criteria unfairly favor certain licensed producers, preventing other distilleries in Maharashtra from entering the MML market. Petitioners state this limits trade and business unfairly, violating constitutional rights by creating arbitrary differences between license holders. They are asking the court to nullify key clauses or strike down the entire resolution. The MML policy was developed following a committee decision in January 2025 to boost excise revenue and an April 2025 report suggesting a Maharashtra-specific liquor category. This followed state increases to excise duties on Indian Made Foreign Liquor (IMFL) in June and July 2025, before MML's duties and pricing were set.
India's Booming Liquor Market
The MML policy challenge comes as India's liquor market is set for substantial growth, expected to climb from about $71 billion in 2023 to over $119 billion by 2032. This expansion is driven by higher incomes, more people living in cities, and a strong trend towards premium and craft spirits. United Spirits, owned by Diageo, has a market value around ₹95,356 crore as of March 2026, with a P/E ratio near 55.4. The company recently sold its IPL team, Royal Challengers Bengaluru, for ₹16,660 crore, a move seen as strengthening its focus on its main spirits business. John Distilleries, a private company, is valued at roughly ₹177 crore and makes Original Choice whisky. Bacardi India, part of a global private group, has grown significantly in India, achieving a 26% annual growth rate over the last three years, making India a key market for them. Other companies like Radico Khaitan are valued at approximately ₹36,794 crore (P/E 71.5), and Globus Spirits at about ₹3,637 crore (P/E 33.8). The MML policy, with its lower duties and price limits, aims to support local production and compete with mass-market liquor, especially after previous excise duty increases on IMFL in Maharashtra in June and July 2025.
Regulatory Hurdles and Market Impact
The legal challenge points to significant risks within India's varied regulatory landscape. Critics argue that the MML policy's restrictive entry rules could create artificial barriers, hindering competition and innovation, which goes against the market's move towards premium products and greater consumer choice. For global companies like Bacardi, dealing with different state policies and excise duties across India creates complexity. Reports suggest the Maharashtra government noted that distilleries using molasses might need to switch to grain-based liquor to qualify for MML, a change allegedly benefiting specific linked entities. While the state reported a 17% increase in excise revenue from July to November 2025 after MML started, some industry observers are hesitant about whether these revenue goals are sustainable long-term, given consumer habits and distribution issues. Lengthy court cases can create uncertainty, discouraging investment and affecting business plans for all companies. The sector also faces challenges from potential competition from imported brands due to trade deals.
What's Next for Liquor Policy and Growth
The Bombay High Court's ruling on this MML policy challenge could establish an important precedent for liquor regulations across Indian states. Maharashtra's government is defending the policy, highlighting its aim to support local producers and use existing factory capacity, alongside the reported revenue increases. Despite these state-led efforts, the overall industry expects continued strong growth, driven by premium products and rising incomes. Many analysts remain optimistic about companies like United Spirits, with strong buy recommendations and price targets based on anticipated earnings growth from better operations and a focus on premium items. How MML, and similar state policies, evolve will likely hinge on balancing government revenue goals with the industry's need for clearer, more predictable rules that can support the fast-growing premium spirits market.