New Delhi | French liquor major Pernod Ricard is facing a major tax and customs dispute in India, with investigating agencies alleging that the company misrepresented details related to Scotch whisky imports in order to reduce customs duty payments. Following an extensive investigation, authorities have reportedly assessed a tax liability of nearly $314 million, or around ₹3,000 crore, against the company. Officials estimate that if the company loses the legal battle, the total amount including penalties and interest could exceed $600 million, or more than ₹5,000 crore.
Pernod Ricard is one of the world’s leading alcoholic beverage companies and sells globally recognised brands such as Chivas Regal whisky and Absolut Vodka. India is considered the company’s largest market, where it has significantly expanded operations over the past several years. Industry experts believe the ongoing dispute could have financial as well as strategic implications for the company’s India business.
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According to investigation reports, authorities have accused the company of failing to fully disclose the actual quality, age and blend composition of imported Scotch whisky and related concentrates brought into India. Officials claim that the alleged discrepancies were intended to reduce the declared import value and thereby lower customs duties, which can go up to 150 percent on imported liquor products.
Investigators have also alleged that the company used certain technical code names in import documentation, making it difficult for customs officials to compare product categories and pricing with those of other importers. Reports mention codes such as “RFM” and “HMW,” which authorities claim were used to classify ordinary Scotch products in a more complex manner to obscure their actual valuation and characteristics.
The investigation further alleges that the company undervalued certain Scotch concentrates by nearly 67 percent. These concentrates were reportedly used in the production of Indian liquor brands such as Royal Stag. Authorities believe the undervaluation led to significant losses in customs revenue over a prolonged period.
However, Pernod Ricard India has strongly denied all allegations. The company has maintained that it complied with all applicable laws and import regulations and did not engage in any unlawful activity. In legal filings, the company has argued that the investigation process lacked fairness and transparency.
In its petition before the Delhi High Court, Pernod Ricard reportedly stated that investigators relied heavily on pricing data from a limited number of companies, including Allied Blenders and Distillers, while ignoring the fact that several other importers were bringing Scotch products into India at even lower prices. The company also alleged that it was not provided complete access to the data and documents used during the investigation, which it claims violates principles of natural justice.
The dispute comes at a time when India’s premium liquor market is witnessing rapid growth and foreign beverage companies are expanding investments in the country. Pernod Ricard currently operates 24 production sites across India and had recently announced plans to establish Asia’s largest malt distillery in Maharashtra. Analysts believe the ongoing legal battle could place additional pressure on the company’s expansion and investment plans.
Experts say that if the allegations made by Indian authorities are eventually proven, the case could become a landmark example in matters related to customs valuation and import compliance in India. It may also lead to stricter scrutiny of pricing structures and import practices adopted by multinational corporations operating in the country.
Apart from this tax dispute, Pernod Ricard is already facing other legal and regulatory challenges in India, including matters linked to antitrust investigations and the Delhi excise policy controversy. The latest case is therefore being viewed as another major challenge for the company on both legal and business fronts. For now, the investigation and court proceedings remain ongoing, while industry observers closely watch the next steps from tax authorities and the judiciary.
