Delhi Government Denies Renewal Of Sales Licence To Pernod Ricard

In a setback to the French spirits major Pernod Ricard, the Delhi government has rejected its application for renewal of sales licence on the ground of the ongoing investigations against the company. The excise department of the government of the national capital territory of Delhi had last week decided not to renew the sales licence of Pernod Ricard, said official sources.

An application from Pernod Ricard was received in September 2022 and it was not accepted then. Following this, the liquor major went to the court which directed the excise department to formally take a decision. That application has been now rejected, they said. The decision was taken on the ground of ongoing investigations against the company in matters related to violation of the excise policy of the Delhi government, sources added. A response could not be ascertained from Pernod Ricard. Meanwhile, the excise department has also rejected the licence of Indospirits and Brindco. Pernod Ricard has the right to appeal against the order before the higher authorities or take a legal course.

This is a setback for Pernod Ricard as India is among its fast-growing markets. Pernod Ricard competes with the British multinational alcoholic beverage company Diageo, which owns United Spirits Ltd here, and some other domestic manufacturers. Pernod Ricard is the world's second-largest wine and spirits organisation and its portfolio comprises over 200 premium brands, including 100 Pipers, Chivas Regal, The Glenlivet, Absolut, Havana Club and Jacob's Creek. It also owns Indian brands such as Blenders Pride and Royal Stag.

Pernod Ricard India is alleged to have financially supported some of its Delhi retailers to stock more of its brands. For this, some officials from the liquor firm allegedly provided bank guarantees. Earlier, the Enforcement Directorate (ED) had arrested Pernod Ricard's executive Benoy Babu in November last year, in the now-scrapped Delhi excise policy-related money laundering case.

The trial court had denied bail to Babu and other accused in the case. Now the bail matter is still pending before the Delhi High Court. Regarding Babu, the trial court had said the oral and documentary evidence suggested he was the brain behind the decision taken by the accused company, Pernod Ricard, for furnishing corporate guarantees of Rs 200 crore for the loans availed by other members of the cartel from HSBC Bank.

This, the court said, was considered an investment to take control of the retail liquor business and to achieve the highest market share in the sale of liquor brands by the company. The money laundering case stems from a CBI FIR which was lodged in the matter after Delhi Lieutenant Governor V K Saxena recommended a CBI probe. The Delhi government implemented the excise policy on November 17, 2021, but scrapped it after the CBI probe was recommended amid allegations of corruption. The government went back to its old excise policy, which was operational before November 17, 2021, from September 1, 2022, in which private players in retail liquor sales were replaced by its four corporations.