Delhi High Court has ruled against Pernod Ricard,a leading French liquor company,in its attempt to restart liquor sales in national capital,and whole thing looks like one more messy chapter in Delhi liquor policy fight.
Pernod Ricard has been stuck in legal dispute with Delhi authorities over licensing issues for quite some time . This latest ruling came after excise department rejected company’s application for sales license,pointing to ongoing investigations which,according to them,put company in negative light.
During hearing,bench led by Justice Purushaindra Kumar Kaurav made it clear that investigations into Pernod Ricard’s practices made it ineligible for liquor license under city’s excise regulations . That is pretty strong position from court,especially when company is saying there is no criminal conviction against it.
And honestly,this is where case becomes uncomfortable for big companies also . Because court is not waiting for conviction only,it is looking at ongoing investigation and alleged irregularities linked to liquor policy as enough reason to block license for now.
Few things standing out clearly here:
- Delhi contributes about 5% to Pernod Ricard's overall sales in India.
- Pernod Ricard has been accused of colluding with local retailers to manipulate market share.
- Pernod Ricard has consistently denied the allegations of collusion and misconduct .
Company’s argument was simple in one sense: no criminal conviction,so why deny license? But court’s stance seems to be that when matter involves liquor business,public health,safety and excise rules,authorities can take stricter view even before final outcome of investigation .
And for Pernod Ricard,this is not just about one city sale counter opening or closing . India is largest market globally for Pernod Ricard by volume,and India accounted for approximately $2.9 billion in sales last year. So Delhi being blocked is not small thing,even if it is about 5% of overall India sales .
There is also brand image issue. When court order talks about alleged irregularities and questions around company’s conduct,it creates pressure beyond immediate revenue. Investors,partners,retailers,everyone starts watching next move more closely.
Pernod Ricard has yet to issue a statement regarding Delhi High Court’s decision. And till company responds or takes next legal step,this whole matter is just hanging there… what happens to its Delhi plans now?
