Indian investigators have
concluded Pernod Ricard withheld the age and composition of its
Scotch whisky imports to hide their true value and pay lower
tariffs, sparking a legal fight after the French company was
asked to pay $314 million in back taxes, documents show.
Pernod, the maker of Chivas Regal whisky and
Absolut vodka – which counts India as its biggest global market
by volume – is seeking to quash a September decision by arguing
that it was not given access to key pricing data in the
investigation.
While the initial tax demand warning was reported by Reuters
in 2022, hundreds of new documents – including investigation
reports and submissions made at the Delhi High Court in recent
months – reveal unreported details of the high-stakes battle.
In September, the Indian investigation concluded that Pernod
“intentionally complicated” its disclosures with new internal
malt codenames to make things more difficult for customs
authorities when comparing its imports with those of its rivals,
the documents show.
Pernod also did not declare “the true description of their
imported malts (i.e. its exact composition and age) with the
intention to hide the actual value of the imported goods and to
avoid comparison,” said an investigators’ report that was
contained in a government filing on January 24.
In a statement, Pernod India said it “rejects any suggestion
of wrongdoing,” maintaining that it has been fully compliant and
it is “addressing this matter through the appropriate legal
channels and remains confident in its position.”
India’s tax authorities did not respond to requests for
comment.
India is asserting Pernod undervalued its bulk Scotch
concentrate imports by 67.49%, sharply reducing the 150% tariff
that New Delhi imposed. Such concentrates are blended with other
ingredients like water and caramel to make whisky brands like
Royal Stag.
The court documents show Pernod’s tax liability currently
stands at nearly 30 billion rupees ($314 million). With
penalties, according to Indian law, the total payout could be
more than $600 million if Pernod loses – an amount that is a
fifth of its last year’s Indian revenue of $2.9 billion – and
three times its profit.
Generate maximum profits
India is Pernod’s biggest market by volume and it
contributes roughly 10 per cent of the company’s worldwide sales. The
tax dispute comes atop an antitrust case and a separate ban in
New Delhi city that Pernod is battling due to allegations of
liquor policy violations. Pernod has denied the allegations.
Despite its challenges, Pernod has been expanding in India,
where it has 24 production sites. In 2024, it unveiled plans to
open its largest malt distillery in Asia in Maharashtra state.
Investigators said the imports at the heart of the tax
dispute were sent from Pernod subsidiary Chivas Brothers U.K.
and the profits earned by undervaluing the whisky were
transferred to the “ultimate holding company” in France.
“Utmost attempts were made by the Pernod Ricard Group
subsidiaries to keep their expenses towards customs duty
disbursements to the minimum and generate maximum profits” for
Pernod India, they allege.
Chivas Brothers U.K. and a spokesperson for Pernod in France
did not respond to queries.
Pernod flights back
Pernod has told the Delhi court that Indian officials
wrongly excluded dozens of other companies that imported Scotch
concentrates at lower prices and instead selectively compared it
to India’s Allied Blenders and Distillers (ABD), whose
import prices were higher.
The comparison was wrong as the quantity of Scotch
concentrates imported by Pernod was on average 15 times higher
than ABD’s, Pernod said in its challenge. It also did not get
access to complete import data used by investigators and so the
findings are “grossly violative of the doctrine of natural
justice,” Pernod argues.
ABD did not respond to Reuters requests for comment.
The Indian government says Pernod’s challenge should be
dismissed because it was provided all relevant data and only ABD
was “found importing similar goods at the comparable level.”
Tax tussles, codenames controversy
Prolonged tax disputes have often frustrated foreign
investors in India and embroiled companies including Volkswagen
.
The current Pernod dispute began in 2014 with a final tax
demand order issued in September 2025. A year earlier, Pernod
told authorities in a letter that the “inordinate delay” had
“already caused grave prejudice to our business interests.”
Some of the allegations in the ongoing tax case revolve
around a contentious “codename” system used for the malts.
Investigators allege that Pernod in 2011 started using new,
India-only internal codenames for its imported Scotch
concentrates, even though the “ultimate product” made in India
remained the same.
Pernod did not disclose composition details of such codes,
which it described as RFM (Rich Fruity Malt) and HMW (Heavy Malt
Whisky).
“Simple products of Scotland, i.e., Scotch Whisky
manufactured using common and prescribed methods by Scotch
Whisky Regulations in the U.K. were complicated just to avoid
comparison with similar goods imported,” the Indian authorities
said.
Pernod in its documents has argued the new codenames were
for a “bouquet of reconstituted Scotch malts.”