The Delhi High Court on Friday dismissed Pernod Ricard's challenge to the denial of an L-1 wholesale liquor licence, holding that the company was ineligible under applicable excise rules due to pending criminal proceedings. Justice Purushaindra Kumar Kaurav passed the order, with a detailed judgment awaited. This ruling represents a significant setback for the French spirits giant, which has been out of the key showcase market for the last three years following the controversy surrounding the now-scrapped Delhi excise policy. The court's decision comes amid ongoing disputes between Pernod Ricard and Delhi authorities, with the judge ruling that the company was 'ineligible' because of the ongoing investigation.
Pernod Ricard approached the court against an order of the Delhi Excise Department rejecting its applications for an L-1 wholesale licence on the ground that the company was facing prosecution by the Enforcement Directorate (ED) in connection with the alleged Delhi excise policy scam. The company contended that authorities had mechanically relied on pending proceedings and ignored a March 2025 order of the financial commissioner, which had directed the Excise Department to reconsider the licence application after finding that a licence could not be denied solely because investigations or proceedings were pending. However, the Excise Department maintained that the prosecution launched by the ED and allegations levelled against the company rendered it ineligible under the Delhi Excise Rules, arguing that rules bar the grant of a licence to persons or entities having a criminal background.
New Delhi represents a key showcase market from where Pernod Ricard has been absent for the past three years. According to Business Standard, the court's rejection of the company's plea means the French spirits giant will continue to be excluded from this important market segment. Pernod counts India as its biggest market globally by volume and the city of New Delhi typically used to account for about 5 per cent of its countrywide sales before it became unable to sell its products. The prolonged absence from Delhi has likely impacted the company's overall sales performance and market presence in India, given the city's significance as a major consumer base for premium spirits. India, in turn, is reportedly the company's largest market globally by volume and contributes nearly $3 billion in annual sales.
The company faces multiple legal and tax issues beyond the liquor dispute. As reported by Reuters, Pernod Ricard is also contesting a tax demand running into hundreds of millions of dollars over allegations of undervaluation of imported liquor products. According to media reports, tax authorities have reportedly asked the company to pay nearly $314 million, or around ₹3,000 crore, in back taxes. With penalties, the total liability could reportedly cross ₹5,700 crore if the company loses the case. The company is additionally facing scrutiny from competition regulators over alleged exclusive arrangements with retailers, with the company denying all allegations in those proceedings as well.
