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French spirits giant faces new antitrust case in India

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Pernod accused of violations by colluding with retailers

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Company says complies with laws, not informed of case

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India ranks as one of Pernod's key growth markets

By Aditya Kalra

NEW DELHI, May 1 (Reuters) - India's competition

watchdog is reviewing accusations that France's Pernod Ricard

colluded with retailers in New Delhi to boost market share, the

latest headache for the spirits giant in a key market, legal

papers seen by Reuters show.

With brands such as Chivas Regal, Glenlivet and Absolut

vodka, Pernod has a share of 17% in a liquor market it says is

its second biggest globally by net sales, but one where it is

embroiled in licence, tax and antitrust difficulties.

The latest accusations figure in a confidential filing in

March on practices in the liquor industry made by an individual

identified only by the first name Mohit, who has a record of

taking up public interest litigations.

The Competition Commission of India (CCI) is reviewing the

case and can order a full investigation, or dismiss the

accusations if not borne out, said a source familiar with the

matter who spoke on condition of anonymity.

Pernod is accused of gaining market share by asking

retailers in the Indian capital to stock more of its goods in

return for helping them secure loans to bid for store licences,

according to the filing.

Reuters reviewed the filing, which is not public, in line

with the watchdog's rules.

In a statement to Reuters, Pernod said it had not been

notified of the new antitrust case, but was committed to comply

with local laws and "instruct and educate our teams" to do the

same.

The competition regulator did not reply to Reuters' queries.

Telephone calls to the complainant went unanswered.

The accusations rely mostly on findings by India's financial

crime agency, the Enforcement Directorate, as it looks into

Pernod's alleged role in a graft case centred on the city's

liquor policy that led to the 2022 arrest of a company official.

Drawing on the findings, the CCI complaint accuses Pernod of

providing $24 million in corporate guarantees to its bankers in

2021 to help city retailers get loans. Retailers then ensured

that 35% of the stock in their shops consisted of Pernod brands.

The findings "clearly spill the beans that the purpose of

the corporate guarantee was cartelisation by Pernod with

selected retailers for brand pushing at the expense of fair

competition," the case document states.

Among Pernod's other woes, it has, for more than a year,

unsuccessfully sought a retail licence for its products in New

Delhi.

It faces another antitrust case for misconduct in south

India and is contesting a tax demand for nearly $250 million,

for allegedly undervaluing imports.

Pernod has repeatedly denied any wrongdoing in all the

cases.

The latest CCI case centres on Enforcement Directorate

findings that Pernod's acting chief financial officer for India

consented in mid-2021 to the issuance of corporate guarantees

for facilitating loans to Delhi retailers, and advised the group

CFO, Helene de Tissot, of it in an email on July 13, 2021.

Pernod's "support" of $24 million to bidders for store

licences had the potential to generate an additional $15 million

"benefit over a three-year period" and the move "will also

enable us to counter local players' threat", the email said.

The CCI case also cites extracts of a Pernod PowerPoint

presentation in June 2021 that mentioned an internal plan to

"take control of retail shops" in New Delhi. Reuters has

previously reported the email and the presentation.