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New Delhi continues investigation into drinks distribution
The New Delhi police anti-corruption unit has widened its investigation into the distribution of alcohol in the city.
It is widely believed that it is examining dealings between most of the big distillers that supplied the government-run shops between 2017 and 2020, and how those agencies may have made early payments in return for the discounts.
The investigation is considering whether there was any wrongdoing in this process and if any discounts given to the state monopoly shops by suppliers were in line with local alcohol laws.
As CEO of United Spirits, Diageo’s India subsidiary and the company’s senior executive, Hina Nagarajan was summoned on 26 July to appear before New Delhi police.
Reuters has reported that United Spirits has since complied with an official demand to supply bank statements and records of financial dealings with the Delhi city agencies relating to the three years in question.
Neither the police nor Diageo has commented on the reports but it is suggested that the investigation has widened and that the trading practices of most suppliers are being drawn into the probe.
Diageo has previously described the Delhi case a “routine information and fact-finding exercise” and said it was cooperating with the authorities. It added it believed police notices may have been sent to other manufacturers.
This is a separate case to that involving the Delhi authorities’ refusal to renew Pernod Ricard’s licence to trade in the City, although that too relates to alleged trading infringements.
Delhi temporarily ended its state monopoly over alcohol sales between 2000 and 2022, allowing private traders to become retailers.
The allegation, which Pernod Ricard contests, is that the French group authorised bank loans to retailers in return for stocking minimum quantities of its products.
Delhi has returned to a state-run monopoly of sales but has refused to renew Pernod Ricard’s licence until this investigation is concluded and the corruption charges against company officials have been dealt with by the courts.
Pernod Ricard is also fighting an accusation that it previously undervalued bulk spirits imports to India to gain a tariff advantage. It is facing a potential fine of US$250 million in that case.
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