French liquor giant Pernod Ricard, the company behind popular brands such as Absolut Vodka and Chivas Regal, is facing mounting challenges in India after suffering setbacks in both a Delhi sales dispute and a massive tax investigation.
The Delhi High Court on Friday rejected Pernod Ricard’s plea seeking permission to resume liquor sales in the national capital, extending a ban that has kept the company’s products off Delhi shelves since 2023.
At the same time, the company is fighting a high-stakes tax battle that could potentially cost it more than ₹5,700 crore if penalties are imposed.
Delhi High Court Rejects Pernod Ricard Plea
Pernod Ricard has remained entangled in the ongoing 2021 Delhi liquor policy investigation, where authorities alleged irregularities involving liquor distributors and retailers.
Delhi authorities earlier denied the company’s licence renewal application, citing “serious allegations” raised by the Enforcement Directorate (ED). Investigators alleged that Pernod Ricard colluded with retailers to unfairly increase its market share under the now-scrapped liquor policy.
As a result, leading Pernod brands, including Absolut Vodka and Chivas Regal, have been unavailable in Delhi for nearly three years.
Delhi traditionally accounted for around five per cent of Pernod Ricard’s total India sales, making the market strategically important for the company.
₹3,000 Crore Back Tax Demand Sparks Legal Fight
In a separate development, Pernod Ricard is also under scrutiny over alleged customs duty violations linked to Scotch whisky imports.
According to reports citing investigation documents, Indian authorities concluded that the company understated the value of imported Scotch whisky concentrates by allegedly concealing details related to their age and composition.
Investigators reportedly claimed that Pernod Ricard:
- Introduced complex internal malt codenames,
- Failed to disclose the exact age and composition of imported malts,
- Undervalued imports by nearly 67.5%,
- Reduced the effective impact of India’s 150% import tariff on Scotch concentrates.
Authorities subsequently demanded nearly ₹3,000 crore in back taxes from the company.
However, with penalties and additional charges, the total liability could reportedly cross ₹5,700 crore if Pernod Ricard loses the legal battle.
Company Rejects Allegations
Pernod Ricard has denied wrongdoing and stated that it has complied with all applicable regulations.
In earlier statements, the company said it was addressing the matter through appropriate legal channels and remained confident in its legal position.
The company also reportedly argued that it was denied access to crucial pricing data used during the customs investigation.
Why India Matters to Pernod Ricard
India is Pernod Ricard’s largest market globally by sales volume, making the ongoing disputes particularly significant.
The company generated approximately $2.9 billion in revenue from India last year, making the country a major contributor to its global business operations.
Industry observers say prolonged legal uncertainty could affect the company’s market share in one of the world’s fastest-growing liquor markets.
Growing Pressure on Global Liquor Giants
The Pernod Ricard case highlights increasing regulatory scrutiny faced by multinational alcohol companies operating in India.
The combined impact of the Delhi liquor policy investigation and the customs tax dispute could become one of the biggest legal and financial challenges faced by a global liquor company in the Indian market.
With court proceedings still underway, the future of Pernod Ricard’s operations in Delhi — and the final outcome of the massive tax dispute — will remain closely watched by the liquor industry and investors alike.
