French liquor major Pernod Ricard has suffered another setback in India after a New Delhi court rejected its plea to resume liquor sales in the capital, extending the company’s absence from the market to nearly three years.
The company, which owns brands including Absolut Vodka and Chivas Regal, has been unable to operate in Delhi since authorities denied the renewal of its licence in 2023 amid investigations linked to the now-scrapped Delhi liquor policy.
India remains Pernod Ricard’s largest market globally by volume, with Delhi previously contributing nearly 5 per cent of its overall India sales. The prolonged disruption continues to impact the company’s business in one of its key urban markets.
The Enforcement Directorate has alleged that liquor manufacturers, retailers and political entities colluded during the 2021 liquor licence auction process in Delhi. Authorities have accused Pernod Ricard of indirectly participating in retail operations through financial arrangements and of allegedly providing incorrect pricing information to authorities to generate unlawful gains. The company has denied all allegations.
Apart from the Delhi licence dispute, Pernod Ricard is also contesting a tax demand exceeding $300 million related to the valuation and classification of imported liquor products. Customs authorities have alleged underpayment of duties linked to imported Scotch products, claims which the company is challenging legally.
The company is additionally facing scrutiny from India’s antitrust regulator over allegations of exclusive arrangements with retailers to promote its brands in the market.
Despite the ongoing legal and regulatory challenges, India continues to remain a strategic growth market for Pernod Ricard, although the company has repeatedly highlighted prolonged litigation and regulatory uncertainty as key concerns impacting business operations and future investments.
