Amid Allegations of Money Laundering and Criminal Activity, India Court Rejects Spirits Megasupplier Pernod Ricard’s Liquor License
Pernod Ricard’s request to renew its liquor license was rejected by the courts in India. (AP Photo/Gurinder Osan)
Pernod Ricard, the major spirits supplier behind brands like Ballantine’s, Jameson, The Glenlivet and Jefferson’s Bourbon, had its L-1 liquor license rejected by India’s New Deli High Court. According to an article published in Hindustan Times on Tuesday, the decision was made due to allegations of criminal activity within the company, which are currently being investigated.
The supplier submitted a plea to challenge the ruling, but it was rejected specifically on the grounds of charges that included jail time involving one of its employees. As of 2022, India was the largest market for the giant wine and spirits vendor, explaining the company’s vested interest in renewing its liquor license.
Pernod Ricard has faced its share of legal woes in India and in February was accused of “cartelization and money laundering.” The charges were issued by The Enforcement Directorate, India’s financial crimes organization.
One of the charges against Pernod Ricard was that it allegedly helped certain alcohol retailers obtain loans from HSBC banks for the assurance that those retailers would sell Pernod Ricard products in exchange. These reciprocal “pay-to-play” tactics led to Pernod Ricard accruing profits to the tune of approximately $1.7 billion, according to the claims.
Pernod Ricard was additionally fined $244 million by the Indian Government for “undervaluing alcohol imports” for over 10 years.
To top off the list of charges, Pernod Ricard’s general manager of international brands, Binoy Babu, was arrested and faced criminal charges for “cartelization of liquor licenses,” according to an article from Just Drinks that was published in November 2022.
It was Babu’s arrest that served as the ultimate point of contention in renewing the French supplier’s license in India.
According to the Hindustan Times, Pernod Ricard was believed to have an active role in the scam, which resulted in the liquor license not being renewed.
“The allegations made therein against [Pernod Ricard] and its employees are serious and cannot be dismissed,” High Court Justice Prathiba M Singh said. “While it can be argued by the petitioner that it cannot be blamed for any unauthorized conduct of its employees, such an argument has not been placed before this court… the said allegations could not have been brushed aside by the Licensing Authority.”
Senior counsel for the company refuted the country’s decision and claimed that Pernod Ricard should not be punished for the actions of one employee.
“[Pernod Ricard] cannot be equated with a criminal,” they said in a statement that was reported by The Spirits Business.
This is not the first instance of a giant liquor supplier being faced with legal action for allegations of illicit financial schemes in order to gain a greater foothold within a highly saturated and competitive liquor marketplace. In 2017, Southern Glazer’s was fined $3.5 million for illegal gifting and inaccurate record keeping, according to The Spirits Business.
The fine issued by the New York State Liquor Authority was the largest in recorded history at the time.
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