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Watchdog Reviews Allegations of Collusion Against Pernod Ricard in India

By  |  May 1, 2024
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India’s Competition Commission is currently scrutinizing allegations of collusion between France’s Pernod Ricard and retailers in New Delhi. Legal documents obtained by Reuters shed light on the latest challenges faced by the spirits giant in one of its crucial markets.

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    Pernod Ricard, renowned for brands like Chivas Regal, Glenlivet and Absolut vodka, commands a significant 17% share in India’s liquor market, which it claims is its second-largest globally in terms of net sales. However, the company finds itself entangled in a web of licensing, taxation and antitrust issues in the region, as reported by Reuters.

    The accusations, brought forth in a confidential filing in March, focus on alleged practices within the liquor industry. The filing, attributed to an individual known only as Mohit, who has a history of initiating public interest litigations, implicates Pernod Ricard in collusive activities with New Delhi retailers.

    According to Reuters, a source familiar with the matter, speaking on condition of anonymity, revealed that the Competition Commission of India (CCI) is currently evaluating the case. The CCI holds the authority to initiate a full investigation or dismiss the allegations if found unsubstantiated.

    The crux of the allegations against Pernod Ricard: purported maneuvers to expand market share. The filing alleges that the company persuaded retailers in the Indian capital to increase their stock of Pernod products by offering assistance in securing loans for store licenses.

    Reuters, which reviewed the confidential filing in accordance with the watchdog’s guidelines, highlighted that Pernod Ricard stated it had not been formally notified of the antitrust case. However, the company affirmed its commitment to compliance with local laws and vowed to educate its teams accordingly.

    The allegations are largely based on the findings of India’s Enforcement Directorate, currently investigating Pernod Ricard’s alleged involvement in a corruption case related to New Delhi’s liquor policy. A company official was arrested in 2022 in connection with the case.

    Drawing from the Enforcement Directorate’s findings, the CCI complaint alleges that Pernod Ricard provided $24 million in corporate guarantees to its bankers in 2021 to facilitate loans for city retailers. In return, these retailers purportedly ensured that 35% of their stock comprised Pernod Ricard brands.

    Source: Reuters