Pernod Ricard faces CCI probe for boosting market share, Legal News, ET LegalWorld | Court Practice News


CCI is investigating Pernod Ricard for allegedly colluding with some retailers in a southern state to hurt competitors, regulatory documents showed, the latest challenge for the French drinks giant in a key market.

The Competition Commission of India (CCI) has been pursuing the matter actively since early this year after senior members reviewed the case filed by Pernod’s Indian rival, Radico Khaitan, and found merit in its allegations, a source with direct knowledge said.

In line with CCI’s policy, details of cases related to collusion among parties are not made public. The source added that CCI could summon Pernod or retailers, ask for documents or even conduct search and seizure operations in the case.

Radico has alleged Pernod violated India’s antitrust laws by entering into agreements with retailers in Telangana state to offer them “additional discounts and benefits” if they abstained from selling Radico’s 8PM whisky brand.

Pernod allegedly asked these retailers to ensure 70% share for its Royal Stag whisky brand at the shops, by entering into what Radico alleged in its case was a “Royal Stag Agreement”, according to a government case document reviewed by Reuters.

Pernod in a statement to Reuters said it has “not been notified of the matter … by any competent authority”.

“Pernod Ricard India is committed to comply with the laws of the country and we instruct and educate our teams to do the same,” it added.

Radico Khaitan and the CCI did not respond to requests for comment.

Reuters is first to report details of Radico’s allegations and the status of the investigation.

As well as Royal Stag, Pernod’s popular brands include Chivas Regal, and the company has a nearly 19% share in India’s $31 billion spirits market, according to Euromonitor. Radico’s market share is 6.6%, with brands including Magic Moments and 8PM.

The latest CCI case adds to Pernod’s regulatory challenges in India. It has failed to get a licence to sell its brands in the capital New Delhi, after India’s financial crime agency accused it last year of violating the city’s liquor policy to boost market share illegally. Pernod denies any wrongdoing.

It also faces a nearly $250 million federal tax demand for undervaluing certain liquor imports, which it has legally challenged.

In the CCI case, Radico alleges that Pernod’s market share rose considerably after it entered into agreements with retailers in Telangana, from 53% in January 2022 to 100% in March 2022, in some of the shops, according to the government case document.

Radico alleged market share of its 8PM brand in some shops fell to 0% from 47%, the document showed.

Pernod has faced allegations of boosting market share illegally in the Delhi liquor case. The Indian federal agency there alleged the French company offered corporate guarantees to some retailers in Delhi, and in return asked them to stock at least 35% of its brands at shops, an allegation the company denies.

  • Published On Sep 15, 2023 at 07:13 PM IST

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