Indian Antitrust Body Raids Alcohol Giants Amid Price Collusion Probe

The offices of prominent alcohol producers Pernod Ricard and Anheuser-Busch InBev (AB InBev) were targeted in surprise antitrust raids by India’s Competition Commission of India (CCI) as part of an investigation into alleged price collusion with retailers in Telangana, according to sources familiar with the matter. The unannounced actions, carried out on Wednesday, represent one of the most significant antitrust crackdowns in the beverage industry in recent years.

The raids took place in Hyderabad and involved local retailers in Telangana, as per multiple sources who declined to be named due to the confidentiality of the ongoing investigation. The CCI has stringent rules to keep details of its probes confidential until cases reach a conclusion.

In a statement, AB InBev, known for its Budweiser beer, emphasized its commitment to compliance. “While we cannot comment on the specifics, we take antitrust compliance very seriously. We are working together in collaboration with the authorities,” the company stated. Pernod Ricard, whose portfolio includes brands like Chivas Regal, also affirmed its cooperation with the investigation, stating that it adheres to Indian laws.

The raids come against the backdrop of earlier allegations, including a case filed by Radico Khaitan, a domestic competitor. According to three sources, Radico accused Pernod Ricard of forging agreements with Telangana retailers to offer exclusive discounts and benefits that undermined the sale of its 8PM whisky brand.

Further complicating the situation, the AB InBev probe reportedly stems from a separate case initiated in July 2022 based on an anonymous complaint. The complaint alleged antitrust cartel-like behavior among Telangana retailers, suggesting they favored AB InBev alcohol products to the exclusion of competitors. Documents reviewed by Reuters suggest the CCI found evidence of a “sudden decline” in the market share of other companies, prompting further investigation.

This week’s actions echo a 2018 investigation into beer giants Carlsberg, AB InBev, and United Breweries, which ultimately resulted in a $100 million collective fine for United Breweries and Carlsberg in 2021. Both companies denied any wrongdoing.

Euromonitor reports that Pernod Ricard holds a 16% share by volume in India’s $35 billion spirits market, while AB InBev commands a 17% share in the country’s beer market, which produces 3 billion liters annually. The latter trails Heineken-controlled United Breweries, the industry leader.

Source: Reuters