INDIA has ordered an antitrust probe into French spirits company Pernod Ricard over allegations that it struck exclusive deals with retailers to push its products over rival brands.
The company, whose brands include Absolut Vodka, Chivas Regal and Beefeater Gin, is accused of proposing financial assistance of about $22 million to retailers in 2021 through corporate guarantees.
According to the complaint, Pernod Ricard offered the guarantees in return for ensuring that its brands made up 35 per cent of the stock sold at the retailers’ stores.
A regulatory order issued on Friday by the Competition Commission of India said it was directing an investigation as “…vertical arrangements between Pernod Ricard and retailers is likely to result in distortion of demand by way of moving retail demand away from the competing brands to Pernod Ricard, artificially, thereby leading to a situation of driving existing competitors out of the market”.
The antitrust watchdog said “such an action is likely to result in restriction of choice to end consumers rather than benefit them in any manner”.
According to the CCI order, the allegations were made by an individual named Mohit from the western city of Jaipur.
“The market share of Pernod Ricard increased from 15 per cent to 35 per cent and it had planned to increase the same to 47 per cent over a period of three years,” the complaint said, referring to the proposed financial assistance.
According to the company’s website, Pernod Ricard “holds one of the most dynamic and premium portfolios” in the alcohol beverage industry and has nearly 1,600 employees in India.
(With inputs from agencies)
