The Competition Commission of India (CCI) has initiated an antitrust investigation into French liquor group Pernod Ricard for allegedly engaging in exclusive arrangements with retailers in Delhi. These arrangements are suspected to promote Pernod Ricard’s brands while restricting rival products in the market. The CCI found merit in claims of ‘exclusive dealing agreements’ that aimed at boosting the company’s market share in Delhi’s Indian Made Foreign Liquor (IMFL) segment.
The investigation stems from allegations of bid rigging in tenders issued by the Delhi Excise Department for wholesale supply of country liquor in 2022-23. It was alleged that two bidders shared their financial quotes during the tender process, seen as a collusive practice and a violation of tender norms. Consequently, the Excise Department annulled the tender and called for a fresh bidding process.
Pernod Ricard allegedly provided corporate guarantees worth around Rs 200 crore in 2021 to support liquor retailers in obtaining bank loans and licenses under Delhi’s excise policy framework. Retailers receiving this financial backing were purportedly encouraged to allocate significant shelf space and stock to Pernod Ricard brands like Chivas Regal and Absolut Vodka. The CCI expressed concerns that such practices could distort demand, diverting retail demand from competing brands.
The CCI’s order directs its Director General (DG) to conduct a thorough investigation into the matter and submit a report within 90 days. The order highlighted internal company communications where executives reportedly discussed gaining a “strategic advantage” in liquor retail zones in Delhi by providing financial support to retailers vying for licenses. The regulator emphasized that these practices might limit consumer choice and harm fair competition in the retail liquor market.
