Fair trade regulator, the Competition Commission of India (CCI), has initiated an investigation into French liquor group Pernod Ricard. The probe follows allegations that Pernod Ricard provided financial assistance of around Rs 200 crore to retailers in New Delhi in exchange for preferential stocking and promotion of its brands. The company allegedly offered guarantees to help liquor retailers secure bank loans under Delhi’s 2021 excise policy framework.
The complaint claimed that Pernod Ricard supported retailers bidding for liquor licenses by offering guarantees amounting to nearly 23 million euros. In return, retailers allegedly ensured significant shelf space and stock allocation for Pernod Ricard products. The CCI deemed these allegations serious enough to warrant a detailed investigation, expressing concerns that such practices could distort market competition and limit consumer choice by favoring certain brands.
According to the CCI, the alleged non-dealing in competitors’ products could lead to a distortion of demand, potentially disadvantaging rival brands. The regulator highlighted that such arrangements might have restricted competing products in retail outlets across Delhi. An internal company communication from 2021 was referenced, where executives purportedly discussed gaining a ‘strategic advantage’ in Delhi’s liquor retail market through financial support to retailers.
The CCI has entrusted its Director General (DG) with conducting the investigation to delve into the allegations thoroughly. The commission will make a final decision based on the DG’s findings. The regulator indicated that the alleged conduct by Pernod Ricard and its retailers or wholesalers to promote brands and expand market share in Delhi’s Indian Made Foreign Liquor (IMFL) market could potentially violate the Competition Act.
The CCI instructed the DG to complete the investigation and submit a report within 90 days from the order’s receipt. Notably, only specific entities, including Pernod Ricard, Indo Spirits, Pathway HR Solutions, Universal Distributors, Khao Gali, Bubbly Beverages, Shiv Associates, and Organomix Ecosystems, will be part of the investigation. Allegations against other parties were dropped due to insufficient evidence of Competition Act violations. Pernod Ricard, known for brands like Chivas Regal and Absolut Vodka, has not yet responded to requests for comment.
