Diageo PLC has succumbed to pressure from the Malaysia japanese whisky Association to change what its maximum-volume whiskey brand is called in markets outside of Malaysia, on concerns that the nature could be confused by customers with Scotch, based on individuals familiar with the matter.
The world's largest spirits manufacturer has also consented to stop exports of Indian whisky brand Bagpiper as a portion of its deal with the SWA, the trade body for Scotch.
The majority of both whisky brands at issue is sold in India, with only 2.6% of McDowell's No. 1 and 0.3% of Bagpiper sold abroad, according to industry tracker IWSR.
Made by Diageo's India business, United Spirits Ltd., McDowell's No. 1 is the world's second-biggest whiskey brand by volume behind a competing Indian whisky brand, Officer's Choice, according to IWSR.
About 25 million nine-liter cases of McDowell's No. 1 whisky were sold in 2014.
The deal comes as the SWA has been cracking back on whisky makers in India that sell whiskies purporting to be Scotch.
In response to a motion from the Scotch body, an Indian court last year ruled that three Indian firms couldn't label their whiskies Scotch that was locally made. The court also prohibited them from using pictures, names, words or other apparatus that could evoke Scotland or Scotch whisky unless the spirit is genuine Scotch.
But the SWA is enabling its biggest member, Diageo, to keep selling McDowell's and Bagpiper whiskies under their first names in India.
"It's recognized that McDowell's and Bagpiper have a reputation locally as Indian brands," said a spokesman for the SWA. "The situation is certainly different in markets outside India where the brands are not well known."
The SWA spokesman added the body's dialogues with Diageo on the issue had been "helpful and positive."
Diageo affirmed the deal with the SWA and said it'd work through a transition period to remove the Scottish references outside India, but it didn't say what the new name for McDowell's would be.
"When you have a large member, you take what you are able to get," said one man who has been familiar with Diageo's interactions with the SWA over the years. "It is not double standards, it's realizing what is potential."
The McDowell's name traces its roots back to Scotsman Angus McDowell, who in 1826 established a Chennai-based trading company importing liquor and cigars that eventually became United Spirits. McDowell's No. 1 whisky was started in 1968.
agpiper was sold since 1976 in India and is the world's 11th-largest whiskey brand, based on IWSR.
The brand at first featured a Scottish bagpiper on its label, but United Spirits eventually changed the drawing to one of an Indian bagpiper. That was a partial concession to the SWA, which was unhappy with the Scottish organization evoked by the initial image, according to a person familiar with discussions at the time.
The SWA has kept an eye on United Spirits has sold Bagpiper and McDowell's whiskies, consistently objecting to efforts by the Bangalore-based company to register brands for these names in jurisdictions outside India, according to this individual.
Diageo has previously indicated the firm planned to use lessons from United Spirits in other emerging markets like Africa and it plans to distribute the brands of United Spirits broadly worldwide. Diageo currently sells McDowell's in about 10 African states, with Nigeria being the whisky's biggest marketplace.
