Delhi liquor policy
ED accuses French spirits group Pernod Ricard of making illegal profits by violating Delhi liquor policy
New Delhi: The Enforcement Directorate (ED) has accused French spirits group Pernod Ricard of illegally making profits in India of $23 million by giving false price information and conspiring in an email campaign to sway New Delhi city's liquor policy, Reuters reported.
The ED has formally named Pernod Ricard as an accused in fresh allegations in its 14000-page chargesheet filed in a Delhi court on January 6.
In November, the financial crimes investigation agency had accused Pernod Ricard, the maker of Chivas Regal, Glenlivet and Absolut Vodka, of violating New Delhi city's liquor policy to boost market share.
Pernod Ricard has denied the allegations, the report said.
The ED accused Pernod of a "conspiracy to gain illegal benefit by submitting the wrong affidavit" to the Delhi government while seeking pricing approvals for its brands.
In 2021, the Delhi liquor policy required liquor manufacturers to reveal their lowest factory prices in the entire nation so that the local government could set competitive prices and boost revenue. But Pernod gave "false", higher prices, helping it earn "excess profit" of $23 million, the agency alleged in the filing seen by Reuters.
As a result of the manipulation, Pernod earned "a huge additional profit which was ineligible to them and should have been passed to the consumers," the filing said, according to the report.
Pernod Ricard India's net profit in 2021-22 stood at $176 million, its regulatory disclosures show, the Reuters report said.
India is a key growth market where Pernod Ricard has a 17% share, it said.
Pernod Ricard India is relying on the judicial process to demonstrate its legal compliance, the company said in a statement to Reuters. It said the agency's allegations were "factually incorrect", without elaborating, and added it is cooperating with the authorities, according to the report.
If proven guilty, its Chief Operating Officer Rajesh Mishra, and Benoy Babu, the head of its international brands business, could be fined and jailed for three to seven years, under Indian law, it added.
The Delhi court has summoned the accused to appear at its trial hearing of the ED’s complaint on February 23.
Babu is already in jail for alleged violations of Delhi's liquor policy. He was arrested in November and his bail plea was dismissed this week.
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