CCI raids Pernod, AB InBev in ‘price collusion’ crackdown on liquor industry: Report

The Competition Commission of India (CCI) has raided offices of alcohol giants Pernod Ricard and Anheuser-Busch InBev (AB InBev) amid an investigation into allegations of price collusion with retailers in a southern state, Reuters reported, citing sources. 

The raids, which took place in Hyderabad and targeted retailers in Telangana, are among the largest industry crackdowns in recent years, according to the report. 

Business Today was unable to verify the development independently. 

“We take antitrust compliance very seriously and are cooperating with the authorities,” AB InBev, maker of Budweiser beer, told Reuters in its response. Pernod Ricard, known for brands like Chivas Regal, did not respond immediately to a comment request. 

"As a responsible corporate citizen, we comply with Indian laws. We are cooperating with the competent authorities on the matter, and we rely on them to demonstrate our good faith and compliance," Pernod Ricard India told Business Today.

The recent raids on Pernod’s Hyderabad office stem from a case filed by local competitor Radico Khaitan. Last year, Reuters reported that Radico accused Pernod of violating antitrust laws by striking deals with retailers in Telangana, offering them “discounts and benefits” in exchange for not selling Radico's 8PM whisky brand. 

The investigation into AB InBev is linked to a probe that began in July 2022, though the details remain undisclosed. 

2018 CCI raids  

In 2018, the CCI also raided the offices of major beer companies, including AB InBev, and initiated an inquiry into potential cartel behaviour. Though the investigation’s findings are not a final verdict, they raised concerns over the conduct of brewers who dominate India’s $7 billion beer market, accounting for 88% of the industry. 

In September 2021, the CCI concluded that companies such as United Breweries Limited (UBL), Carlsberg India, SABMiller India (now part of AB InBev India), and the All India Brewers’ Association (AIBA) were involved in a beer cartel.  

These companies were found to have coordinated prices, restricted beer supply in certain states, shared the market in Maharashtra, and coordinated distribution to premium institutions in Bengaluru. The CCI imposed a combined penalty of Rs 870 crore ($116.75 million) on UBL and Carlsberg India, while AIBA was found responsible for facilitating the cartel.  

The case was triggered when AB InBev used CCI’s “leniency programme” to disclose that it had detected a cartel while integrating SABMiller’s operations in India. Later in 2018, UB and Carlsberg also filed leniency applications.