INDIA – Pernod Ricard has been rejected to market its products in New Delhi, India, due to an ongoing investigation against the company.
The government of India, through its agencies, the excise department of the government of the National Capital Territory of Delhi, refused to renew the license of the French alcohol giant that warrants the company to market its products in the city.
An application from Pernod Ricard was received in September 2022 and was not accepted then. Following this, the liquor major went to the court, which directed the excise department to formally take a decision.
Order from city authorities, seen by Reuters, said the decision was reached after reviewing Pernod’s license application, along with “considerable documents” received from investigating agencies in India.
It cited many of the agencies’ allegations, including that Pernod illegally made profits by giving false price information and financially supported retailers in exchange for stocking more of its brands, violating rules.
The 12-page order also stated, “Pernod Ricard India Private Limited and its employees had an active involvement in the said criminal conspiracy.”
This is a step back for the world’s second-largest wine and spirits company, as it is reported to have 17% of the Indian market share, competing with the British multinational company Diageo.
Pernod Ricard had previously told Just Drinks its failure to get a license in the region only affects its business in New Delhi but acknowledged “we might suffer heavy losses” in the municipality.
“Delhi represents less than 5% of our sales in India and about 2% of the Indian population,” the company said.
In November 2022, Pernod Ricard said consumer confidence in India is at an all-time high, despite inflation, following a 22% business expansion in India in the last quarter of the financial year.
India’s alcoholic beverages market was US$52.5 billion in 2020, and it is expected to grow at a CAGR of 6.8% between 2020 and 2023, according to the Indian Council for Research on International Economic Relations.
The company is also facing a push from Indian authorities to pay US$244 million for reportedly undervaluing concentrate imports for over a decade.
In a statement, Pernod Ricard India said was working on “asserting and demonstrating its position to the Indian authorities” and that it had “always endeavored to act with full transparency and in compliance with customs and regulatory requirements.”