New Delhi, May 9 (IANS) Fair trade regulator the Competition Commission of India (CCI) has ordered an investigation into French liquor group Pernod Ricard over allegations that the company extended financial assistance worth around Rs 200 crore to retailers in New Delhi in exchange for preferential stocking and promotion of its brands.

The antitrust regulator’s order said the allegations relate to corporate guarantees provided by Pernod Ricard to help liquor retailers secure bank loans under Delhi’s excise policy framework introduced in 2021.

The complaint alleged that the company offered guarantees amounting to nearly 23 million euros (around Rs 200 crore) to support retailers bidding for liquor licences, while retailers in return ensured significant shelf space and stock allocation for Pernod Ricard products.

The CCI observed that the allegations warranted a detailed probe, noting that such arrangements could potentially distort market competition and limit consumer choice by disadvantaging rival brands.

“The non-dealing in the product of the competitors is likely to result in distortion of demand by way of moving retail demand away from the competing brands,” the regulator said in its order.

The regulator further noted that such practices may have resulted in restrictions on competing products in retail outlets across Delhi.

The order also referred to an internal company communication from 2021 in which executives allegedly discussed gaining a ‘strategic advantage’ in Delhi’s liquor retail market through financial support to retailers.

The CCI said the investigation will now be conducted by its Director General (DG), who will examine the allegations in detail before the commission takes a final view in the matter.

“Accordingly, the Commission directs the Director General (DG) to cause an investigation into the matter in relation to the alleged conduct under the provisions of Section 26(1) of the Act,” the CCI said in its order.

The CCI said it was prima facie of the view that the alleged conduct by Pernod Ricard and its retailers or wholesalers to push brands and increase market share in Delhi’s Indian Made Foreign Liquor (IMFL) market could fall under “exclusive dealing agreements” prohibited under the Competition Act.

The regulator further directed the DG to complete the investigation and submit a report within 90 days from the date of receipt of the order.

The CCI also said only select entities like Pernod Ricard, Indo Spirits, Pathway HR Solutions, Universal Distributors, Khao Gali, Bubbly Beverages, Shiv Associates and Organomix Ecosystems would remain part of the investigation, while allegations against other parties were dropped due to a lack of evidence indicating violations under the Competition Act.

Pernod Ricard, whose portfolio includes brands such as Chivas Regal and Absolut Vodka, did not immediately respond to a request for comment.

Notably, the company has previously faced scrutiny in matters related to Delhi’s liquor policy and tax disputes.

–IANS

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