CCI Probes Pernod Ricard To Find If It Used Retailers To Promote Brand

CCI Probes Pernod Ricard To Find If It Used Retailers To Promote Brand

The probe is part of the company’s ongoing legal challenges in India, and if found guilty, it could be penalized

The Competition Commission of India (CCI) has raided the Pernod Ricard’s Telangana office over allegations that the company colluded with retailers to promote its whisky brand while ignoring a rival, Radico Khaitan.

In the biggest liquor sector crackdown in recent years, Pernod's office was raided in December, after a 2022 complaint by Radico Khaitan accused Pernod of colluding with retailers not to stock a Radico whisky brand.

Pernod, allegedly, asked some retailers to achieve a 70 percent market share for its brand, earning discounts and royalties.

India is the largest market for Pernod globally in terms of volume.

It is contesting a $250 million tax demand for allegedly undervaluing imports and faces investigation into violations of New Delhi's liquor policy.

However, Pernod, maker of brands including Chivas Regal, has stated complying with Indian laws. It feigned ignorance on any government document detailing the antitrust investigation.

The French liquor giant said, "We are confident that we will demonstrate our good faith and compliance through the ongoing investigative process.”

In its recent complaint to the CCI, Radico said it relied on an undated and unsigned business agreement that promised some retailers ‘special discounts’ if they did not sell Radico's brand.

The antitrust investigators observed that Pernod was behind the arrangement. Earlier, it alleged that the anti-competitive agreement was ‘facilitated and coordinated’ by Pernod India. It gave incentives to retailers to promote its brand through an agent, a local marketing agency in Hyderabad.

Meanwhile, in New Delhi, federal investigators accused Pernod of similar practices, accusing it of offering financial support to retailers in exchange for ensuring 35 percent of stock in their shops is Pernod's.

The company has repeatedly denied any wrongdoing.

The recent raids were to collect evidence, such as meeting records or copies of agreements, that may help the CCI to develop its case.

If found guilty, Pernod Ricard India could be penalized up to three times its annual profit during the period the collusion took place, or 10 percent of its turnover for each year.

Pernod's 2023-24 India sales were $3.1 billion.