New Delhi: A court in India's capital has dealt a major setback to French drinks company Pernod Ricard by rejecting its request to resume liquor sales in New Delhi, extending a business dispute that has kept the company out of one of its most important markets for nearly three years.
The ruling, delivered by the Delhi High Court on Friday, upheld the decision of local authorities to deny the company a liquor licence while it remains under investigation by federal agencies. The court said the authorities were justified in refusing the licence application because of the ongoing probe into alleged irregularities linked to Delhi's former liquor policy.
Pernod Ricard, one of the world's largest spirits producers, had argued that it had not been convicted of any wrongdoing and therefore should not be prevented from conducting business in the city. However, the court ruled that the pending investigations were sufficient grounds for authorities to reject the application.
The decision represents another challenge for the company in India, which is its largest market by volume worldwide. The company owns several globally recognised brands, including Chivas Regal, Absolut Vodka and Ballantine's. Before the dispute began, New Delhi accounted for a significant share of its sales in India and was considered an important market for premium alcoholic beverages.
The case is linked to the controversial Delhi liquor policy that was introduced in 2021 and later withdrawn following allegations of corruption and favouritism. Investigators have alleged that certain liquor companies and retailers received undue benefits under the policy. Pernod Ricard has consistently denied any wrongdoing and has maintained that its business operations complied with the law.
The company has faced repeated licence rejections in Delhi since the policy was scrapped. It had approached the court in an effort to overturn the latest rejection and regain access to the market. The latest judgment means that the company will remain unable to sell its products directly in the capital for the foreseeable future.
The setback comes at a time when Pernod Ricard is also facing scrutiny on other fronts in India. Earlier this month, India's Competition Commission ordered an investigation into allegations that the company and some of its business partners engaged in anti competitive practices in the liquor market. Pernod Ricard has denied those allegations and said it would cooperate with the inquiry.
In a separate matter, Indian customs authorities recently accused the company of providing incomplete information about imported Scotch whisky products. Officials allege that the company understated certain details related to product composition and age, resulting in lower customs duties. Pernod Ricard has rejected the accusations and is challenging the findings through legal channels.
Industry analysts say the latest court ruling could have both financial and reputational consequences for the company. While Pernod Ricard continues to perform strongly in many parts of India, its inability to operate in the national capital remains a significant obstacle. Delhi is considered an influential market because of its large consumer base and its importance in shaping trends in the premium liquor segment.
Despite the latest setback, observers expect Pernod Ricard to continue pursuing legal remedies and defending itself against the various investigations. The company has repeatedly stated that it remains committed to the Indian market and believes it has acted within the law.
For now, however, the court's decision means that one of the world's leading spirits producers will remain locked out of New Delhi, while the wider investigations surrounding the capital's liquor policy continue to unfold.