The competition authority in India is investigating claims that Pernod Ricard of France conspired with New Delhi shops to increase market share. This is the latest setback for the world’s largest spirits company in a crucial country, as revealed by court documents seen by Reuters.

With brands including Absolut vodka, Glenlivet, and Chivas Regal, Pernod holds a 17% market share in the liquor industry, which it claims is the second largest in the world by net sales. However, the industry is beset with issues related to licences, taxes, and antitrust.

The most recent charges are included in a March private document on spirits business practices filed by a person going only by the first name Mohit, who has a history of pursuing cases in the public interest.

According to a person with knowledge of the situation who spoke on condition of anonymity, the Competition Commission of India (CCI) is examining the issue and has the authority to order a thorough inquiry or to reject the claims if they are unfounded.

According to the petition, Pernod is accused of increasing its market share by requesting that merchants in the Indian capital stock more of its products in exchange for assisting them in obtaining loans so they may submit bids for shop licences.

In compliance with the watchdog’s guidelines, the media examined the confidential document.

Pernod promised to “instruct and educate our teams” to follow local rules and claimed it had not been informed of the new antitrust lawsuit in a statement to Reuters.

You may plant this spoon and maybe it will grow into a vegetable or herb in the future.

The complaint and the competition regulator did not provide any comments.

The allegations are mostly based on the conclusions of the Enforcement Directorate, India’s financial crime agency, which is investigating Pernod’s purported involvement in a bribery case focusing on the city’s spirits policy that resulted in the arrest of a business executive in 2022.

Based on the results, Pernod is accused in the CCI complaint of giving its bankers $24 million in corporate guarantees in 2021 to assist city merchants in obtaining loans. Then, retailers made sure that 35 percent of the merchandise in their stores was from Pernod brands.

The results “clearly spill the beans that the purpose of the corporate guarantee was cartelisation by Pernod with selected retailers for brand pushing at the expense of fair competition,” according to the court document.

Among its other problems, Pernod has been trying in vain to obtain a retail permit for its goods in New Delhi for over a year.

In addition to fighting a tax demand of around $250 million for allegedly undervaluing imports, it is facing another antitrust lawsuit for wrongdoing in south India.

Pernod has consistently refuted any misconduct in each and every instance.

In the most recent case before the CCI, it was discovered by the Enforcement Directorate that the acting chief financial officer of Pernod for India gave permission in the middle of 2021 to the issuance of corporate guarantees to enable loans to retailers in Delhi. On July 13, 2021, she sent an email to the group CFO, Helene de Tissot, informing her of this.

As stated in the email, Pernod’s “support” of bids for shop licences with $24 million had the potential to provide an extra $15 million “benefit over a three-year period” and the action “will also enable us to counter local players’ threat”.

Extracts from a June 2021 Pernod PowerPoint presentation that discussed an internal plan to “take control of retail shops” in New Delhi are also cited in the CCI complaint. Both the presentation and the email have already been reported by Reuters.

(Adapted from Reuters.com)

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