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Pernod Ricard denies wrongdoing in India case
Pernod Ricard has strongly denied that the company or any of its employees has broken Indian law.
This follows a Reuters report that an investigation ordered by Paris found that senior executives in its Indian subsidiary broke the law in the New Delhi region by colluding with local retailers.
A spokesman in Paris said:
“We deny all allegations levelled in the news report. Further we deny any inconsistency in our stand. We have always maintained that there has been no wrongdoing by our employees.
“The privileged report that was leaked was prepared at an early stage of the procedure, based on limited facts and information.
“Since then, we have received overwhelming legal opinion from Indian jurists and lawyers, based on a more comprehensive understanding of the underlying evidences, very clearly stating that the allegations by the Enforcement Directorate are unfounded and that PRI or its employees have committed no wrongdoing under Indian laws.
Market context and impact
India is Pernod Ricard’s second largest market, one which chairman and chief executive Alexandre Ricard has labelled “must win”.
The Delhi region comprised about 5% of the group’s sales in India before its licence was suspended in the wake of the allegations.
In 2023, the Enforcement Directorate, which polices financial crime, accused employees of Pernod Ricard India of engaging in money laundering by unlawfully facilitating US$24 million in corporate guarantees to help some retailers fund their licence bids in exchange for stocking more Pernod Ricard brands.
This followed the introduction of a law in 2021 which removed the state’s monopoly on alcohol stores. That has since been reversed.
Yesterday Reuters alleged that a May 2023 draft report produced by Indian law firm Shardul Amarchand Mangaldas, which Pernod Ricard India hired to conduct an internal probe, said three executives – including the then-chief operating officer, Rajesh Mishra – “have acted in violation of DEP” [Delhi Excise Policy], which prohibited manufacturers from investing in retail.
Leaked report and alleged violations
“There are conversations indicating that CG (corporate guarantee) was a means to have control over market share through retail control,” said the report.
“Their conduct is also suggestive of a larger conspiracy between (the employees) and other industry players,” it said, adding it could “have implications” for Pernod in legal proceedings.
It is known that Diageo’s local subsidiary United Spirits has passed to the authorities records of its own activities during the period.
In addition to the Delhi case, Pernod is contesting a US$250 million federal tax demand for allegedly undervaluing bulk imports.
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