India accuses Pernod Ricard of hiding Scotch whisky ingredient values

India has accused Pernod Ricard of concealing the age and composition of its Scotch whisky concentrates to reduce import duties, escalating a customs fight that could reshape how global brands disclose product value in one of the world’s toughest spirits markets.

Indian tax authorities concluded that Pernod Ricard withheld key details about Scotch malt concentrates imported from Chivas Brothers in the United Kingdom, including the ingredients’ age and composition. Investigators also said the company used internal codenames that made it harder to compare the imports with rival products, and they concluded the Scotch shipments were undervalued by 67.49%. That finding helped drive a tax demand of nearly 30 billion rupees, or about $314 million.

The stakes are unusually high because India is Pernod Ricard’s biggest market by volume and accounts for roughly 10% of the company’s worldwide sales. The concentrates at the center of the case were used in Indian brands including Royal Stag, linking the dispute directly to a major local business built on imported inputs, local blending and a tariff regime where small changes in declared value can produce large changes in tax liability.

Pernod Ricard is challenging a September decision in the Delhi High Court, arguing that it was not given access to key pricing data during the investigation. That makes the case about more than customs classification. It is also a test of process, evidence and how tax officials can judge value when a multinational routes specialized ingredients through a complicated supply chain with internal naming systems and layered product specifications.

The dispute has been building since an initial tax-demand warning in 2022. Indian outlets said penalties could push Pernod’s total exposure above $600 million if it loses, a sum that would be about one-fifth of its last annual Indian revenue of $2.9 billion and roughly three times its profit. For a company selling Chivas Regal whisky and Absolut vodka, the numbers underscore how quickly alleged underpricing can turn into a strategic threat, not just a legal one.

The case also lands while Pernod faces other pressures in India, including an antitrust case, a separate New Delhi ban tied to liquor policy issues and scrutiny by India’s financial crime agency over alleged collusion in Delhi liquor license auctions. Together, those fronts show how closely Indian regulators are now examining multinational alcohol groups that operate across imports, brands and local bottling.