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Delhi ban, ₹3,000 crore payout: Absolut vodka maker punished in mega cases
Pernod Ricard's brands, including Absolut vodka, have been unavailable in Delhi since 2023 as the company remains embroiled in the 2021 liquor policy case.
Absolut Vodka lovers in Delhi are unlikely to get their hands on their favourite liquor bottle anytime soon, with the high court rejecting the plea of its maker — French giant Pernod Ricard — seeking permission to sell its products in the city on Friday.
Pernod Ricard's brands, including Absolut vodka and Chivas Regal, have been unavailable in Delhi since 2023 as the company remains embroiled in the 2021 liquor policy investigation. The dispute centres on whether the firm, named as an accused in the case, can be allowed to continue operations in the city.
Separately, Pernod has been at loggerheads with authorities over tax-related accusations, according to a Reuters report, which said that investigators have concluded that the company withheld the age and composition of its Scotch whisky imports to hide their true value and pay lower tariffs.
The above allegations sparked a legal fight after the French company was asked to pay $314 million (about ₹3,000 crore in current USD-INR rate) in back taxes, Reuters reported, citing documents show.
Pernod counts India as its biggest market globally by volume and Delhi typically used to account for about five per cent of its countrywide sales before it became unable to sell its products.
Pernod Ricard did not immediately comment on the verdict.
Authorities in Delhi had rejected Pernod's liquor license application, citing "serious" allegations levelled by Directorate of Enforcement (ED) that the company colluded with retailers to illegally boost its market share in 2021.
Pernod accused of hiding whisky age, asked to pay ₹3,000 crore back tax
Reuters reported on May 27 that investigators in India have concluded that Pernod Ricard concealed the age and composition of its Scotch whisky imports to understate their actual value and reduce tariff payments, triggering a legal battle after the French liquor giant was asked to pay $314 million in back taxes, according to documents.
The company argues it was denied access to crucial pricing data used during the investigation.
Although Reuters had reported the initial warning over the tax demand in 2022, hundreds of newly reviewed documents - including investigation reports and submissions filed in the Delhi high court in recent months - reveal previously unreported details of the dispute.
According to the documents, the probe in India concluded in September that Pernod "intentionally complicated" its disclosures by introducing new internal malt codenames, allegedly making it harder for customs officials to compare its imports with those of competitors.
Investigators also said Pernod failed to declare "the true description of their imported malts (i.e. its exact composition and age) with the intention to hide the actual value of the imported goods and to avoid comparison," according to an investigators' report included in a government filing dated January 24.
In a statement, Pernod India had said it "rejects any suggestion of wrongdoing," maintaining that it has been fully compliant and it is “addressing this matter through the appropriate legal channels and remains confident in its position.”
It is alleged that Pernod undervalued its bulk Scotch concentrate imports by 67.49 per cent, sharply reducing the 150 per cent tariff that Delhi imposed. Such concentrates are blended with other ingredients like water and caramel to make whisky brands like Royal Stag.
While Pernod's tax liability currently stands at nearly 30 billion rupees ($314 million), according to court records cited by Reuters, with penalties, according to law, the total payout could be more than $600 million — roughly ₹5,725 crore — if Pernod loses - an amount that is a fifth of its last year's Indian revenue of $2.9 billion — roughly ₹27,700 crore — and three times its profit.
