India antitrust body raids Pernod, AB InBev in liquor industry crackdown, sources say (updated)

United Breweries

19/12/2024 07:54

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      India antitrust body raids top liquor companies, sources
say
    

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      Accusations centre on collusion with retailers in a state
    

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      Surprise raids at shops, offices of liquor firms, sources
say
    

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      Pernod faces many regulatory challenges in India
    

  
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    By Aditya Kalra
       NEW DELHI, Dec 19 (Reuters) - India's antitrust body has
raided some offices of alcohol giants Pernod Ricard  PERP.PA 
and Anheuser-Busch InBev  ABI.BR  as it investigates accusations
of price collusion with retailers in a southern state, sources
familiar with the matter said.
    Wednesday's surprise raids by the Competition Commission of
India (CCI) targeted offices in the city of Hyderabad, and some
retailers in nearby Telangana state, the five sources said, in
one of the biggest such industry crackdowns in recent years.
    The sources spoke on condition of anonymity as they were not
authorised to speak to the media.
    In a statement, AB InBev, which makes Budweiser beer, said,
"While we cannot comment on the specifics, we take antitrust
compliance very seriously. We are working together in
collaboration with the authorities."
    Pernod, maker of brands such as Chivas Regal, did not
immediately respond to a request for comment. 
    The CCI did not immediately respond to a request for comment
on the matter, but its rules require details of raids and
investigations in price collusion to be kept confidential until
the conclusion of cases.
    The biggest previous crackdown in the beer industry, in 2018
saw raids on Carlsberg  CARLb.CO , AB InBev and United Breweries
 UBBW.NS  in an investigation that ran for years.
    Heineken-controlled United Breweries and Carlsberg were
fined more than $100 million collectively in 2021, though both
have repeatedly denied wrongdoing.
    This week's raids at Pernod's Hyderabad office follow a case
filed by local rival Radico Khaitan, three of the sources said.
    Last year, Reuters reported that Radico accused Pernod of
violating antitrust laws by entering into pacts with retailers
in Telangana that offered them "discounts and benefits" to
abstain from selling Radico's 8PM whisky brand.
    The sources said the AB InBev raid was related to an
investigation triggered in July 2022, details of which are not
public.
    The case was based on an anonymous complaint that accused
retailers in Telangana of entering into some "cartel-like"
agreements on beer purchases, boycotting all brands other than
AB InBev's, leading to a market share surge for the company,
according to a Reuters review of case papers.
    The CCI's initial assessment said the case merited
investigation as there was evidence of "sudden decline" in
market shares of companies other than AB InBev, the document
showed.
    Some state retailers were also raided this week in relation
to the cases, the sources added.
    In 2023, Pernod had a share of 16% by volume in India's $35-
billion spirits market, Euromonitor says. AB InBev holds a share
of roughly 17% in a beer market that amounts to 3 billion litres
a year, second to Heineken's United Breweries.
    The latest CCI raids add to Pernod's regulatory challenges
in India.
    Pernod is battling a $250-million federal tax demand for
allegedly undervaluing imports, faces two antitrust cases and
cannot sell its alcohol in New Delhi, on grounds of an 
investigation into violations of its liquor policy.
    Pernod has denied wrongdoing in all cases.

 (Reporting by Aditya Kalra; Additional reporting by Aditi Shah;
Editing by Clarence Fernandez)
 ((Email: aditya.kalra@tr.com; X: @adityakalra;))