Absolut Vodka fans in Delhi are unlikely to be able to get their hands on a bottle of their favorite spirit anytime soon, as the Supreme Court rejected the application of its maker – French giant Pernod Ricard – for permission to sell its products in the city on Friday.
Pernod Ricard’s brands, including Absolut vodka and Chivas Regal, have been unavailable in Delhi since 2023 as the company remains embroiled in a probe into the liquor policy 2021. The dispute centers on whether the company, which has been named as an accused in the case, can be allowed to continue its operations in the city.
Separately, Pernod has been at loggerheads with authorities over tax-related accusations, according to a Reuters report, which said investigators concluded that the company withheld the age and composition of its Scotch whiskey imports to hide their true value and pay lower customs duties.
The above allegations sparked a legal battle after the French company was asked to pay $314 million (about $1.1 billion USD). $Reuters reported, citing documents that show Rs 3,000 crore (at current US dollar-Indian rupee rates) in back taxes.
Pernod considers India its largest market globally by volume, and Delhi typically accounted for about five percent of its nationwide sales before it was unable to sell its products.
Pernod Ricard did not immediately comment on the ruling.
Authorities in Delhi have rejected Pernod’s liquor license application, citing “serious” allegations leveled by the Enforcement Directorate (ED) that the company colluded with retailers to illegally boost its market share in 2021.
Pernod, who is accused of concealing the age of the whisky, asked for payment $3000 Crores in arrears tax
Reuters reported on May 27 that investigators in India concluded that Pernod Ricard concealed the age and composition of its Scotch whiskey imports to understate their actual value and reduce tariff payments, sparking a legal battle after the French liquor giant was asked to pay $314 million in back taxes, according to documents.
The company says it was denied access to critical pricing data used during the investigation.
Although the initial warning about the tax demand was reported by Reuters in 2022, hundreds of newly reviewed documents — including investigative reports and submissions to the Delhi High Court in recent months — reveal details of the dispute that were not previously reported.
According to the documents, an investigation in India concluded in September that Pernod “deliberately complicated” his disclosures by introducing new internal code names for barley, making it difficult for customs officials to compare his imports with those of competitors.
Investigators also said Pernod failed to declare “the true description of the imported barley (i.e., its exact composition and age) with the intent to conceal the actual value of the imported goods and avoid comparison,” according to the investigators’ report included in a government filing dated Jan. 24.
Pernod India said in a statement that it “rejects any suggestion of wrongdoing”, stressing that it is fully compliant and that it is “addressing this matter through appropriate legal channels and remains confident in its position.”
Pernod allegedly understated its imports of Scotch concentrate by 67.49 per cent, leading to a sharp reduction in the tariff imposed by Delhi by 150 per cent. These concentrates are mixed with other ingredients such as water and caramel to make whiskey brands such as Royal Stag.
While Pernod’s tax liability currently stands at nearly 30 billion rupees ($314 million), according to court records cited by Reuters, with the penalties, according to the law, the total payments could reach more than $600 million — roughly $5,725 crore – if Pernod loses – an amount that represents almost a fifth of its Indian revenue last year of $2.9 billion – $27,700 crores – three times its profits.
