ED accuses Pernod Ricard of New Delhi’s liquor violation

Enforcement Directorate of India has accused French spirits group Pernod Ricard in Delhi court for 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.

In its detailed 14,000 page filing on January 6 in New Delhi court, ED formally named the French group’s local unit as an accused.

Indian federal agency has accused Pernod of a ‘conspiracy to gain illegal benefit by submitting a wrong affidavit’ to Delhi authorities while seeking pricing approvals for its brands.

As per New Delhi’s liquor police in 2021, liquor manufacturers need to disclose their lowest factory prices in the entire nation so that the local government could set competitive prices and boost revenue.

However, Pernod gave ‘false,’ higher prices, helping it earn ‘excess profit’ of $23 million, the agency alleged in the filing seen by Reuters.

The agency, in its report, has stated that Pernod has earned a huge additional profit which was ineligible to them and should have been passed to the consumers.’

Pernod’s regulatory disclosures show that India’s net profit in 2021-22 stood at $176 million. In its response to Reuters, Pernod Ricard India said that it was relying on the judicial process to demonstrate its legal compliance.

It further claimed that the agency’s allegations were ‘factually incorrect,’ without elaborating and added it is cooperating with the authorities.

Meanwhile, Pernod Ricard India Pvt. Ltd, represented by 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.

The Delhi court has asked the accused in the case to be presented at its trial hearings of the Indian agency’s complaint on February 23.

Notably, Babu was arrested in November for alleged violations of Delhi’s liquor policy and his bail plea was rejected this week and he continues to be in jail.