India claims Pernod Ricard violated rules to boost market share

New Delhi — Pernod Ricard violated the liquor policy of India’s capital city by financially supporting retailers who in exchange stocked more of the French company’s brands and boosted its market share, the country's financial crimes agency alleges.

The documents are not public and details of the allegations against Pernod have not been previously published. In his bail document, seen by Reuters, Babu says his arrest was “illegal” and he played no role in Pernod’s decision to extend corporate guarantees. Babu could not be reached for comment and his lawyer did not respond.

Pernod counts India as a key growth market where it has a 17% share. While the market share for New Delhi alone was not available, industry sources say the capital is critical for any company as it is an affluent and urban tourist hub that serves as a showcase market.In exchange for financial support by Pernod, New Delhi retailers who received the loans “had to ensure” that 35% of the stocks in their shops would be Pernod products, the investigating agency said in its documents.

Under the policy, liquor manufacturers were barred from applying for the retail licences to avoid formation of syndicates that could lead to over-charging and brand pushing. One Enforcement Directorate document dated November 10 says: “The main motive of Pernod Ricard in cartel creation was to ensure that the retail shops of the cartel partners purchased higher quantity of Pernod Ricard brands ... in lieu of the financial assistance provided.”

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