Pernod Ricard India “strongly denies” liquor policy allegations – Reuters

Pernod Ricard India says it “strongly denies the allegations” made by India’s Enforcement that it violated the city’s liquor policy, according to Reuters.

In court documents filed in November, India’s Enforcement Directorate said that Pernod India provided corporate guarantees worth 2 billion rupees ($25 million) in 2021 to its banker HSBC. The brewing company then asked it to facilitate loans to retailers, who used the funds to bid for liquor store licences in New Delhi.

The violation stated that Pernod India financially supported retailers who, in exchange, stocked more of the company’s brands and boosted its market share.

The Delhi government’s policy prohibited manufacturers from participating in retail sales directly or indirectly, and Pernod was said to be “in contravention” as it effectively used bank guarantees to invest in retailers, said the documents. 

Benoy Babu, head of international brands for Pernod India, was arrested in November and remains in jail over the case. He faces allegations of money laundering under Indian laws and violating Delhi’s liquor policy rules, but has denied wrongdoing. Babu, who has not been charged, is seeking bail, which a New Delhi court will hear on 19 January.

In his bail document, seen by Reuters, Babu says his arrest was “illegal,” and he played no role in Pernod’s decision to extend corporate guarantees.

Pernod Ricard India said it “will continue to fully cooperate with the Indian authorities in this matter”.

The court documents do not allege any wrongdoing by HSBC. The bank said in a statement to Reuters it could not comment on the matter, which is “under investigation by the authorities.”