India’s antitrust regulator has ordered an investigation into French spirits maker Pernod Ricard over allegations it struck exclusive arrangements with retailers to boost sales of its brands at the expense of rivals.
The Competition Commission of India (CCI) said in an order issued on Friday that the company allegedly offered financial assistance worth 200 crore rupees ($22 million) to retailers in 2021 in the form of corporate guarantees.
According to the complaint, the support was tied to a requirement that Pernod Ricard products account for 35% of stock sold in participating stores.
The CCI said the alleged vertical arrangements were likely to distort demand by shifting retail sales away from competing brands and could eventually force rivals out of the market.“Such an action is likely to result in restriction of choice to end consumers rather than benefit them in any manner,” the regulator said.
The complaint was filed by an individual identified as Mohit from the western Indian city of Jaipur.
The filing alleged Pernod Ricard’s market share rose from 15% to 35% following the proposed financial assistance scheme, with plans to increase it further to 47% over three years.
Pernod Ricard, whose brands include Absolut, Chivas Regal and Beefeater, says on its website that it employs nearly 1,600 people in India and holds one of the alcohol industry’s most premium portfolios.