INDIA – Pernod Ricard’s latest attempt to obtain a license to sell alcohol in India’s capital has been rejected, with New Delhi authorities citing ongoing investigations into suspected violations of the city’s liquor policy, according to an excise department order.
The rejection compounds Pernod Ricard’s difficulties in India. The French drinks group is currently facing two antitrust cases and contesting a tax demand of nearly US$250 million for alleged undervaluation of imports.
Pernod’s brands, including Chivas Regal and Absolut vodka, have been unavailable in New Delhi since late 2022 after a previous license application was rejected in April last year.
Despite these setbacks, Pernod Ricard maintains its stance of innocence. The company insists it is eligible for a license and has denied any wrongdoing.
India is a crucial market for Pernod, where it holds a 17 percent share and competes with rival Diageo.
New Delhi Excise Commissioner Krishna Mohan Uppu rejected Pernod’s appeal against the rejection of its previous license application. According to Reuters, the decision was influenced by ongoing investigations into the company.
The excise department order cited an ongoing investigation by India’s federal financial crime agency, which has accused Pernod of illegally profiting by providing false information to Delhi officials in 2021 and violating regulations by financially supporting retailers to stock more of its brands.
Pernod Ricard’s appeal argued that the company had fulfilled all requirements for the city license and accused city officials of pre-empting ongoing criminal proceedings. Nevertheless, the authorities upheld their decision, citing the ongoing probe.
India accounts for 10 percent of Pernod Ricard’s group sales, with the Delhi market previously contributing 5 percent of its sales in the country, according to CFO Helene de Tissot.
As an urban tourist hub, New Delhi is a critical showcase market for premium brands, making it essential for any liquor company operating in India.
This comes as Pernod Ricard recently finalized a deal to sell a selection of its wine assets to Australian Wine Holdco Limited (AWL).
The company stated that this sale would allow it to focus on its global spirits and Champagnes portfolio, which drives its business growth.
The deal includes wine brands such as Jacob’s Creek, Brancott Estate, and Campo Viejo, along with seven wineries. Pernod Ricard will retain wine brands, including Etchart in Argentina, Chateau Sainte Marguerite in France, and Kenwood Vineyards in the US.
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