Liquor major Pernod accused of withholding Scotch composition, age to avoid paying higher tariffs
The tax dispute related to Pernod started in 2014, however, the final tax demand order was made in September last year.
French liquor major Pernod Ricard withheld the age and composition of its Scotch whisky imports to hide their true value and pay lower tariffs, news agency Reuters reported citing an investigation by India. The revelation has sparked a legal tussle after the company was asked to pay $314 million in back taxes, the documents showed.
Pernod, with India being its largest global market by volume, is now seeking to quash the decision by arguing that it did not have access to key pricing data during the investigation, Reuters reported.
Hundreds of fresh documents, including investigation reports and submissions made to the Delhi High Court over the past few months, have revealed unreported details of the high-stakes battle, the news agency reported in its exclusive.
In September, the probe concluded that Pernod “intentionally complicated” its disclosures with new internal malt codenames to make the situation further difficult for customs authorities when comparing its imports with those of its rivals, Reuters noted, citing the documents.
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,” the report in a government filing stated.
India has asserted that Pernod undervalued its bulk Scotch concentrate imports by 67.49 per cent, sharply reducing the 150 per cent tariff imposed by the Centre.
According to court documents, Pernod’s tax liability currently stands at nearly 30 billion rupees ($314 million).
With penalties in India, the total payout could be over $600 million, which is a fifth of its Indian revenue of $2.9 billion — and three times its profit in 2025.
However, Pernod India firmly rejected any wrongdoings and said it was following the legal route to handle the matter.
Over a statement, the company 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”.
Pernod told the Delhi court that officials in India wrongly excluded dozens of other companies that imported Scotch concentrates at lower prices while selectively comparing it to India’s Allied Blenders and Distillers (ABD), Reuters quoted.
The comparison needs to be scrutinised, with the quantity of Scotch concentrates imported by Pernod being on an average 15 times higher than ABD’s, Pernod stated 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 argued, according to the exclusive report.
The Indian government, however, called for dismissing Pernod’s challenge as “it was provided all relevant data and only ABD was “found importing similar goods at the comparable level.”
The tax dispute related to Pernod started in 2014, however, the final tax demand order was made in September last year.
In 2024, Pernod expressed in front of authorities via a letter that the “inordinate delay” had “already caused grave prejudice to our business interests,” the news agency quoted.
A few allegations in the ongoing tax case revolves around the contentious “codename” system used by Pernod for its malts.
Investigators have alleged that Pernod in 2011 started using new, India-specific internal codenames for its imported Scotch concentrates, even as the “ultimate product” made in India remained the same.
“Simple products of Scotland, i.e., Scotch Whisky manufactured using common and prescribed methods by Scotch Whisky Regulations in the UK were complicated just to avoid comparison with similar goods imported,” the Indian authorities stated.
Pernod did not disclose composition details of such codes, which it described as RFM (Rich Fruity Malt) and HMW (Heavy Malt Whisky).
It also argued the new codenames were for a “bouquet of reconstituted Scotch malts,” Reuters reported.
India contributes roughly 10 per cent of Pernod’s global sales, according to Reuters. An antitrust case and a separate ban in New Delhi has now led Pernod to fight against the allegations of liquor policy violations.
Even as Pernod has denied the allegations, it has continued to expand across India, where it owns 24 production sites, reported Reuters.
Moreover, in 2024, it unveiled plans to open its largest malt distillery in Asia in the Indian state of Maharashtra, Reuters noted.
According to investigators, the imports involved in the tax dispute were sent from Pernod subsidiary Chivas Brothers UK and the profits earned by undervaluing the whisky were transferred to the “ultimate holding company” in France, the report revealed.
“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 alleged.
French liquor major Pernod Ricard withheld the age and composition of its Scotch whisky imports to hide their true value and pay lower tariffs, news agency Reuters reported citing an investigation by India. The revelation has sparked a legal tussle after the company was asked to pay $314 million in back taxes, the documents showed.
Pernod, with India being its largest global market by volume, is now seeking to quash the decision by arguing that it did not have access to key pricing data during the investigation, Reuters reported.
Hundreds of fresh documents, including investigation reports and submissions made to the Delhi High Court over the past few months, have revealed unreported details of the high-stakes battle, the news agency reported in its exclusive.
In September, the probe concluded that Pernod “intentionally complicated” its disclosures with new internal malt codenames to make the situation further difficult for customs authorities when comparing its imports with those of its rivals, Reuters noted, citing the documents.
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,” the report in a government filing stated.
India has asserted that Pernod undervalued its bulk Scotch concentrate imports by 67.49 per cent, sharply reducing the 150 per cent tariff imposed by the Centre.
According to court documents, Pernod’s tax liability currently stands at nearly 30 billion rupees ($314 million).
With penalties in India, the total payout could be over $600 million, which is a fifth of its Indian revenue of $2.9 billion — and three times its profit in 2025.
However, Pernod India firmly rejected any wrongdoings and said it was following the legal route to handle the matter.
Over a statement, the company 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”.
Pernod told the Delhi court that officials in India wrongly excluded dozens of other companies that imported Scotch concentrates at lower prices while selectively comparing it to India’s Allied Blenders and Distillers (ABD), Reuters quoted.
The comparison needs to be scrutinised, with the quantity of Scotch concentrates imported by Pernod being on an average 15 times higher than ABD’s, Pernod stated 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 argued, according to the exclusive report.
The Indian government, however, called for dismissing Pernod’s challenge as “it was provided all relevant data and only ABD was “found importing similar goods at the comparable level.”
The tax dispute related to Pernod started in 2014, however, the final tax demand order was made in September last year.
In 2024, Pernod expressed in front of authorities via a letter that the “inordinate delay” had “already caused grave prejudice to our business interests,” the news agency quoted.
A few allegations in the ongoing tax case revolves around the contentious “codename” system used by Pernod for its malts.
Investigators have alleged that Pernod in 2011 started using new, India-specific internal codenames for its imported Scotch concentrates, even as the “ultimate product” made in India remained the same.
“Simple products of Scotland, i.e., Scotch Whisky manufactured using common and prescribed methods by Scotch Whisky Regulations in the UK were complicated just to avoid comparison with similar goods imported,” the Indian authorities stated.
Pernod did not disclose composition details of such codes, which it described as RFM (Rich Fruity Malt) and HMW (Heavy Malt Whisky).
It also argued the new codenames were for a “bouquet of reconstituted Scotch malts,” Reuters reported.
India contributes roughly 10 per cent of Pernod’s global sales, according to Reuters. An antitrust case and a separate ban in New Delhi has now led Pernod to fight against the allegations of liquor policy violations.
Even as Pernod has denied the allegations, it has continued to expand across India, where it owns 24 production sites, reported Reuters.
Moreover, in 2024, it unveiled plans to open its largest malt distillery in Asia in the Indian state of Maharashtra, Reuters noted.
According to investigators, the imports involved in the tax dispute were sent from Pernod subsidiary Chivas Brothers UK and the profits earned by undervaluing the whisky were transferred to the “ultimate holding company” in France, the report revealed.
“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 alleged.
