Pernod Ricard Faces Antitrust Probe in India Over Accusations of $24M in Pay-to-Play ‘Support’ For Liquor Stores
Pernod Ricard faces an internal probe in India from the country’s “competition watchdog.” (Photo: AP Photo/Gurinder Osan)
Reuters reported on Wednesday that a major global spirits company, Pernod Ricard, is facing an internal probe from India’s “competition watchdog.”
The conglomerate is accused of offering $24 million in “support” for retailers in New Delhi bidding on liquor store licenses and faces an additional antitrust case over accusations of “undervaluing imports.”
In July, India’s New Delhi High Court rejected Pernod Ricard’s liquor license, and Reuters reports that the company has been attempting to get it back for over a year.
The latest developments occurred after a whistleblower named Mohit made a confidential filing on the company’s alleged practices to the Competition Commission of India, which is currently reviewing the case.
Pernod is accused of using a “pay-to-play” tactic in which it allegedly asked Indian liquor stores to put more of its products on shelves in exchange for help in obtaining loans to get licenses.
In an email that was purportedly sent on July 13 2021, the CCI claimed that the acting CFO of Pernod Ricard agreed to such practices, and shared the news with the company’s Group CFO, Helene de Tissot.
The email cited a business plan of offering $24 million to “support” liquor stores attempting to gain licenses, claiming that such a move would generate $15 million within three years. The funds were allegedly “corporate guarantees,” provided to bankers to help liquor store owners obtain the loans, according to Reuters. The email additionally stated that such a move would “enable [Pernod Ricard] to counter local players’ threat.”
The investigation additionally unveiled bits of a PowerPoint presentation given at the company, citing an aim to “take control of retail shops” in New Delhi.
When the findings were reported in July, the company was fined $244 million by the Indian Government for its actions of “undervaluing alcohol imports,” for a decade.
Pernod Ricard’s General Manager of International Brands, Binoy Babu was additionally arrested and slapped with a criminal charge of “cartelization of liquor licenses,” according to the Hindustan Times.
As for the latest developments in the case, the CCI claimed the evidence points to the fact “that the purpose of the corporate guarantee was cartelisation by Pernod with selected retailers for brand pushing at the expense of fair competition.”
Pernod Ricard is not the only major liquor distributor to be in the throes of legal woes. Southern Glazers Wine and Spirits was forced to shell out $5.5 million as part of a class action lawsuit settlement in March after the company allegedly charged “illegal” late fees in California.
The company is facing an additional lawsuit from Provi, over claims that the mega distributor boycotted Provi and forced retailers to use Southern’s technology.
Southern Glazers currently faces an ongoing investigation with the FTC.
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