Pernod Ricard India Accused of Forming Cartel, Money Laundering

Pernod Ricard India, a subsidiary of the world’s second-largest spirits firm, has been implicated in an elaborate scheme to fix the market in their favor. (Photo: Cineberg/Shutterstock)

The Enforcement Directorate, India’s economic crime-fighting agency, has accused Pernod Ricard India of participating in cartelization and money laundering.

French-based Pernod Ricard is the world’s second-largest seller of wine and spirits. As of 2022, India was the company’s largest market by volume and its third biggest contributor to international profits.

Details of the alleged crimes were first brought to light last October when the Indian government demanded that Pernod Ricard pay USD 244 million for allegedly undervaluing alcohol imports into the country for over a decade.

In November, Pernod Ricard Executive Benoy Babu would go on to be arrested in a probe investigating preferential retailer agreements.

At the time, exact details were scarce as to the extent of cartelization that Pernod Ricard India was being accused of.

In January, the Enforcement Directorate made public a full list of charges against the company.

Chief among them was the claim that Pernod Ricard had helped specific alcohol retailers get loans from HSBC Bank, then ensured that those retailers stocked Pernod Ricard products in order to boost their market share.

“Pernod Ricard provided a corporate guarantee of Rs 200 crore [USD 24 million] to five retail entities with which the conspiracy of cartelization was hatched,” claims the Enforcement Directorate filing.

“The company is also involved in the concealment of the true nature of the transaction and projecting it as untainted property by portraying the corporate guarantee as financial support when it was actually an investment from Pernod Ricard into these retailers with a condition of keeping 35% stocks of Pernod brands out of the total stock in the retail zone at any point of time.”

Filings further allege that the company accrued an estimated USD 1.7 billion in profits due to their underhanded market share increase.

Pernod Ricard India says that they are fully cooperating with authorities in the ongoing case, but claims that the allegations are “factually incorrect.”

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