The ban on sale of liquor like Absolute Vodka and Shivas Regal remains in place in Delhi. Delhi High Court has rejected the petition of French liquor giant Pernod Ricard, in which the company had sought permission to sell its products in Delhi. The company is out of the Delhi market since 2023 due to being an accused in the Delhi Liquor Policy investigation of 2021. Serious allegations by ED, case of collusion with retailers Delhi authorities have rejected Pernod Ricard’s liquor license application. The reason for this is the serious allegations made by the Enforcement Directorate (ED), which states that the company had colluded with retailers (liquor sellers) to illegally increase its market share in the year 2021. Now the entire controversy hinges on whether this company which has come under investigation can be allowed to do business again in Delhi or not. There is currently no reaction from Pernod Ricard on this court decision. True age of whiskey hidden, tax outstanding of ₹2,996 crore Apart from the liquor policy controversy, Pernod Ricard is also embroiled in a major legal dispute with Indian tax authorities. According to a Reuters report, Indian investigators have concluded that the company deliberately concealed the true age and composition of its Scotch whiskey imports. This was done so that the actual price of imported goods could be shown lower and less custom duty (tariff) would have to be paid. After this revelation, this French company has been asked to pay the back outstanding tax of $ 314 million i.e. about ₹ 2,996 crore. Court documents and investigation reports revealed that Pernod had deliberately obfuscated its information during the investigation, which was completed in September last year. The company introduced new codenames for internal malt, making it extremely difficult for customs officials to compare these imports with goods from competitors. According to the investigators’ report, the company did not disclose the correct details (exact composition and age) of the imported malt, which was aimed at tax evasion and concealing the real value. However, Pernod India has strongly rejected all these allegations, saying that it has followed all the rules and is responding to it through legal channels. 67.49% less apparent value to avoid 150% tariff Pernod will have to pay ₹5,725 crore penalty if it loses the case India is the world’s largest market for Pernod in terms of volume. Before this controversy, about 5% of the company’s total Indian sales came from Delhi alone. Currently, as per court records, the company has a tax liability of around ₹3,000 crore. But if the company loses this legal battle, then the total payment along with penalties as per rules could exceed $ 600 million i.e. about ₹ 5,725 crore. This huge amount is one-fifth of the company’s last year’s Indian revenue ($2.9 billion or about ₹27,676 crore) and three times its total profit. How is whiskey made? Companies like Pernod Ricard import ‘bulk Scotch concentrate’ into India from abroad. After this, by adding fixed quantity of water, neutral spirit and other ingredients like caramel to this thick material, popular brands like ‘Royal Stag’ in India are prepared. Import of this concentrate attracts a heavy custom tariff of up to 150% in India.
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Ban on sale of Absolut Vodka-Chivas Regal continues in Delhi: Pernod Ricard owes ₹3,000 crore tax; License canceled after ED allegations
