Pernod Ricard's Delhi Liquor Licence Appeal Rejected, Absolut and Chivas Remain Off-Shelf

Pernod Ricard Fails to Secure Licence in New Delhi

A significant blow has been dealt to French spirits giant Pernod Ricard as an Indian court rejected its plea seeking permission to sell its products in New Delhi on Friday. This development marks a major setback for the company in a key market where it is currently embroiled in a number of legal and tax issues.

Tensions between Pernod and Delhi authorities have been simmering for three years, with officials repeatedly denying the company a licence to sell its products, including Absolut vodka and Chivas Regal whisky. The denial of a licence has been linked to an ongoing investigation by the federal financial crime agency, which accuses Pernod of colluding with some Delhi retailers to boost its market share. Pernod has consistently denied these allegations.

Despite its assertions that it has not been convicted, the company has been deemed "ineligible" to receive a licence due to the ongoing investigation. This latest rejection from city authorities came in February, prompting Pernod to approach the court, claiming that three years of denials had left its business "hopelessly fettered" in New Delhi.

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Pernod Ricard's inability to sell its products in New Delhi has significant implications for the company, which counts India as its biggest market globally by volume. Prior to the licence restrictions, the city of New Delhi typically accounted for around 5% of the company's countrywide sales.

The company is also facing additional challenges in India, including a demand from Indian tax authorities to pay $314 million in back taxes on some of its Scotch imports.