Pernod’s Delhi drought deepens as Indian court rejects liquor sales plea

An Indian court on Friday rejected French liquor giant Pernod Ricard’s plea seeking permission to resume sales in New Delhi, extending a three-year absence from one of the company’s most important showcase markets.

The maker of Absolut vodka and Chivas Regal whisky has been locked in a prolonged legal and regulatory battle with authorities in the Indian capital, where its licence renewal application was rejected in 2023 amid an ongoing investigation into the city’s now-scrapped liquor policy.

Also Read: Authorities allege Pernod Richard withheld Scotch composition, age in effort to pay lower tariffs under $314 mln refund case


Pernod ⁠counts India as its biggest market globally ​by volume and the city of New ​Delhi typically used to account for about 5% of its countrywide sales before it became unable to sell its products, reports Reuters.

The latest setback adds to mounting business and regulatory troubles for Pernod in India, its biggest market globally by volume.

Delhi battle drags on

Pernod and Delhi authorities have remained at loggerheads over whether the company should be allowed to sell its products while being named as an accused in the liquor policy investigation.

The Enforcement Directorate, India’s financial crime agency, has alleged that liquor manufacturers, retailers and politicians colluded to illegally profit from the 2021 auction of retail licences in New Delhi.

The agency said Pernod was “in contravention” of policy rules that barred manufacturers from participating in retail sales, directly or indirectly, by effectively using bank guarantees to invest in retailers.

It also accused the company of illegally making profits of $23 million by giving false price information to Delhi authorities.

Pernod has strongly denied the allegations.

Court filings reviewed by Reuters earlier showed the company argued its Delhi business had been “hopelessly fettered” since authorities blocked its licence renewal, leaving its brands unavailable in the capital for three years.

Pressure builds on multiple fronts

The Delhi dispute is only one of several challenges confronting Pernod in India.

The company is separately contesting a federal tax demand exceeding $300 million linked to the valuation of its liquor imports over more than a decade.

Indian customs investigators have alleged Pernod concealed details about the age and composition of Scotch imports to lower tariff payments. In a 2022 filing, customs authorities described the company as a “habitual litigant” and accused it of conspiring to defraud the government of revenue.

Pernod is challenging the demand in the Delhi High Court.

India’s antitrust watchdog has also ordered an investigation into allegations that Pernod entered exclusive arrangements with retailers to promote its brands and boost market share at the expense of rivals.

Despite the mounting scrutiny, India remains central to Pernod’s global ambitions. The company has repeatedly described regulatory disputes and “ever-lasting litigation” as a major strain on its business and investment plans in the country.