New Delhi: India’s competition watchdog is currently scrutinizing allegations that Pernod Ricard, a French spirits giant, colluded with retailers in New Delhi to gain market share, according to legal documents obtained by the international news agency Reuters. This presents yet another challenge for the company in one of its crucial markets.
With renowned brands like Chivas Regal, Glenlivet, and Absolut vodka under its umbrella, Pernod claims a 17% share in India’s liquor market, which it asserts is its second-largest globally by net sales. However, the company faces a myriad of issues ranging from licensing and tax disputes to antitrust challenges in this market.
The recent allegations stem from a confidential filing made in March, accusing Pernod of engaging in questionable practices within the liquor industry. The complaint was submitted by an individual identified only as Mohit, known for his involvement in public interest litigations.
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The Competition Commission of India (CCI) is currently evaluating the case and has the authority to initiate a full investigation or dismiss the allegations if they are unfounded, according to a source familiar with the matter who requested anonymity.
The accusations against Pernod revolve around purported efforts to increase market share by persuading retailers in New Delhi to stock more of its products. Allegedly, the company offered assistance to these retailers in securing loans for store licenses in exchange for prioritizing Pernod’s brands on their shelves.
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While Pernod has stated that it has not been officially informed of the new antitrust case, it emphasizes its commitment to complying with local laws and ensuring that its teams adhere to the same standards.
The complaint draws heavily on findings by India’s Enforcement Directorate, particularly in relation to a corruption case involving the city’s liquor policy, which led to the arrest of a Pernod official in 2022. The complaint alleges that Pernod provided corporate guarantees totaling $24 million to its bankers in 2021 to facilitate loans for Delhi retailers, with the condition that a significant portion of their inventory consisted of Pernod brands.
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The document contends that these actions amount to cartelization and unfair competition, as Pernod allegedly prioritized its own interests over fostering a level playing field in the market.
In addition to this latest controversy, Pernod faces ongoing challenges in obtaining retail licenses for its products in New Delhi, as well as other legal disputes, including an antitrust case in south India and a significant tax demand.
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Despite these legal battles, Pernod has consistently denied any wrongdoing. However, the latest revelations underscore the complexities and hurdles faced by multinational corporations operating in India’s highly regulated and fiercely competitive liquor market.
