Pernod Ricard Faces Multiple Regulatory and Business Challenges in India

French spirits giant Pernod Ricard, known for popular brands like Chivas Regal whisky and Absolut vodka, is facing a series of major legal, regulatory, and business challenges in India, its largest market globally by volume. The company competes with global liquor major Diageo in one of the world’s fastest-growing alcohol markets, but ongoing disputes and investigations have created significant hurdles for its operations and expansion plans.

Federal Tax Dispute Over Import Valuation

One of Pernod Ricard’s biggest challenges in India is a federal tax dispute worth more than $300 million. Indian customs authorities have accused the company of underreporting the value of its Scotch whisky imports for over a decade.

According to investigators, Pernod allegedly withheld details about the age and composition of its Scotch products to reduce their declared value and pay lower import tariffs. In an October 2022 court filing, India’s customs authority described Pernod as a “habitual litigant” and accused the company of conspiring to defraud the government of revenue.

Pernod Ricard has challenged the tax demand in the Delhi High Court, arguing that authorities did not provide access to key pricing data used during the investigation.

Antitrust Investigation Over Retail Practices

Pernod is also under scrutiny from India’s competition regulator. The Competition Commission of India (CCI) has ordered an investigation into allegations that the company entered into exclusive agreements with retailers to promote its liquor brands while limiting opportunities for rival companies.

Since 2024, the antitrust watchdog has been examining claims that Pernod worked with retailers in New Delhi to increase its market share through unfair trade practices.

Delhi Liquor Policy Investigation

The company has also been facing an Enforcement Directorate (ED) investigation since 2022 related to Delhi’s controversial 2021 liquor licensing policy.

The probe focuses on alleged collusion between liquor manufacturers, retailers, and politicians during the auction of liquor retail licences in the national capital. Delhi’s liquor policy clearly prohibited manufacturers from directly or indirectly participating in retail sales.

According to the Enforcement Directorate, Pernod violated these rules by allegedly using bank guarantees to financially support liquor retailers. The agency also claimed the company illegally earned $23 million by providing false pricing details to Delhi authorities.

Pernod Ricard has strongly denied all allegations related to the case.

Business Hit After Delhi Licence Rejection

In April 2023, Delhi authorities refused to renew Pernod Ricard’s liquor sale licence, citing the ongoing investigations against the company. This decision significantly affected Pernod’s presence in one of India’s most important liquor markets.

The company told the Delhi court that the licence rejection caused massive financial losses because its products became unavailable in the capital.

In May 2026, reports said Delhi regulators are trying to dismiss Pernod’s latest legal challenge against the licence rejection. Pernod argues that the continued denial has severely restricted its business operations in the city for nearly three years.

Long-Running Legal Battles Affecting Investment Plans

Pernod Ricard has previously expressed frustration over India’s regulatory environment. The company says tax disputes dating back to 1994 have made business operations increasingly difficult.

In a 2021 letter to Prime Minister Narendra Modi, Pernod stated that constant litigation had become a major burden on its business and had delayed fresh investments planned for expanding its India operations.

India Remains a Key Market Despite Challenges

Despite these challenges, India remains one of Pernod Ricard’s most strategically important markets. However, with ongoing tax disputes, competition investigations, enforcement actions, and licensing hurdles, the company faces a difficult path in maintaining and growing its position in the Indian alcoholic beverage market.