Why liquor-giant Pernod Ricard is facing antitrust probe in India
What's the story
Competition Commission of India (CCI) has launched an investigation into French liquor giant Pernod Ricard. The probe is based on allegations that the company struck exclusive deals with retailers in New Delhi to promote its brands over competitors. The complaint claims that in 2021, Pernod provided $24 million in corporate guarantees to its bankers to help city retailers secure loans.
Market impact
Allegations of skewed market demand and limited consumer choice
The CCI said that the alleged deals could distort demand by shifting retail demand away from competing brands. The complaint also alleged that the retailers ensured 35% of their stock comprised Pernod brands. This, if proven, could limit consumer choice and skew market demand in favor of the liquor giant.
Probe duration
Probe to take months, case referred to investigation unit
The CCI has referred the case to its investigation unit, which will probe the allegations in detail. This process could take months before a final order is issued. The probe comes after an internal Pernod email from 2021 was revealed, where executives discussed gaining a "strategic advantage" across New Delhi zones and providing money in support to retailers bidding for licenses.
Legal battles
Pernod facing multiple legal challenges in India
An internal investigation by Pernod had found that senior executives at its India unit had violated the law by colluding with retailers in New Delhi. However, the company has denied any wrongdoing both in court and publicly. The CCI's investigation comes amid other legal challenges for Pernod Ricard in India, including a $250 million federal tax demand.