French spirits giant Pernod Ricard — known for premium brands like Chivas Regal and Absolut — is currently navigating one of its toughest business phases in India, its largest market by volume.
From massive tax disputes and antitrust scrutiny to ongoing investigations linked to Delhi’s liquor policy, the company is facing multiple regulatory and operational challenges that could impact its long-term growth strategy in the country.
₹2,500+ Crore Tax Dispute Intensifies Pressure
One of the biggest hurdles for Pernod Ricard is a federal tax demand exceeding $300 million. Indian customs authorities have accused the company of undervaluing Scotch whisky imports over several years by allegedly concealing details related to age and composition, leading to lower import duties.
The company has challenged the demand in the Delhi High Court, maintaining that it was denied access to crucial pricing data used during the investigation.
Antitrust Probe Raises Competition Concerns
India’s competition regulator has also launched an investigation into allegations that Pernod Ricard entered exclusive arrangements with retailers in Delhi to push its brands ahead of competitors.
The probe is examining whether such practices unfairly influenced market share and restricted competition in one of India’s most important liquor markets.
Delhi Liquor Policy Case Continues to Haunt Business
Pernod Ricard has additionally come under the scanner of the Enforcement Directorate in connection with the controversial 2021 Delhi liquor policy case.
Investigators allege the company indirectly participated in retail operations despite restrictions under the policy and benefited through questionable financial arrangements with retailers. Authorities have also accused the company of providing inaccurate pricing information that allegedly resulted in unlawful gains.
The company has repeatedly denied all allegations.
Business Hit After Delhi Licence Rejection
In a major setback, Delhi authorities rejected Pernod Ricard’s liquor licence renewal in 2023, citing ongoing investigations. Since then, many of its popular brands have struggled to maintain visibility in the capital market.
The company recently approached the court again, arguing that the prolonged licensing issue has severely impacted its operations and business continuity in Delhi for nearly three years.
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Investment and Expansion Plans Under Stress
India remains a critical growth market for global liquor companies, especially for premium whisky and vodka categories. However, Pernod Ricard has earlier stated that continuous litigation, tax disputes, and regulatory uncertainties have made expansion and investment decisions increasingly difficult.
The company has also highlighted supply-chain disruptions and operational bottlenecks affecting its India business in recent years.
India’s High-Stakes Liquor Market
Despite the ongoing legal and regulatory battles, India continues to be a high-potential market for global spirits giants including Diageo and Pernod Ricard.
How these investigations and disputes unfold could significantly shape the future of premium liquor business operations in India.
