Indian investigators have concluded Pernod Ricard withheld the ​age and composition of its Scotch whisky imports to hide their true value and pay lower tariffs, sparking a legal fight after the French company was asked ‌to pay $314 million in back taxes, documents show.

Pernod, the maker of Chivas Regal whisky and Absolut vodka - which ​counts India as its biggest global market by volume - is seeking to quash a September decision by arguing that ⁠it was not given access to key pricing data in the investigation.

While the initial tax demand warning was reported by Reuters in 2022, hundreds of new documents - including investigation reports and submissions made at the Delhi High Court in recent months - reveal unreported details of the high-stakes battle.

In September, the Indian investigation ‌concluded that Pernod "intentionally complicated" its disclosures with new internal malt codenames to make things more difficult for customs authorities when comparing its imports with those of its rivals, the documents show.

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," said ‌an ⁠investigators' report that was contained in a government filing on January 24.

In a statement, Pernod India 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."

India's tax authorities did not respond to requests for comment.

India is asserting Pernod undervalued its bulk Scotch concentrate imports by 67.49%, sharply reducing the 150% tariff that New Delhi imposed. Such concentrates are ​blended with other ingredients like water and caramel to make ‌whisky brands like Royal Stag.

The court documents show Pernod's tax liability currently stands at nearly 30 billion rupees ($314 million). With penalties, according to Indian law, the total payout could be more than $600 million if Pernod loses - an amount that is a fifth of its last year's Indian revenue of $2.9 billion - and three times its profit.

Generate maximum profits

India is Pernod's biggest market by volume and it contributes roughly 10 per cent ‌of the company's worldwide sales. The tax dispute comes atop an antitrust case and a separate ban in New Delhi city ​that Pernod is battling due to allegations of liquor policy violations. Pernod has denied the allegations.

Despite its challenges, Pernod has been expanding in India, where it has 24 production sites. In 2024, it unveiled plans to open ⁠its largest malt distillery in Asia in Maharashtra state.

Investigators said the imports at the heart of the tax dispute were sent from Pernod subsidiary Chivas Brothers U.K. and the profits earned by undervaluing the whisky were transferred to the "ultimate holding company" in France.

"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 allege.

Chivas Brothers U.K. and a spokesperson for Pernod in France did not respond to queries.

Pernod flights back

Pernod has told the Delhi court that Indian officials wrongly excluded dozens of other companies that imported Scotch concentrates at lower prices and instead selectively compared it to India's Allied Blenders and Distillers (ABD), whose import prices were higher.

The comparison was wrong as the quantity of Scotch concentrates imported by Pernod was on average 15 times higher than ABD's, Pernod said 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 argues.

ABD did not respond to Reuters requests for comment.

The Indian government says Pernod's challenge should be dismissed because it was ​provided all relevant data and only ABD was "found importing similar goods at the comparable level."

Tax tussles, codenames controversy

Prolonged tax disputes have often frustrated foreign investors in India and embroiled companies including Volkswagen .

The current Pernod dispute began in ⁠2014 with a final tax demand order issued in September 2025. A year earlier, Pernod told authorities in a letter that the "inordinate delay" had "already caused ⁠grave prejudice to our business interests."

Some of the allegations in the ongoing tax case revolve around a contentious "codename" system used for the malts.

Investigators allege that Pernod in 2011 started using new, India-only internal codenames for its imported Scotch concentrates, even though ‌the "ultimate product" made in India remained the same.

Pernod did not disclose composition details of such codes, which it described as RFM (Rich Fruity Malt) and HMW (Heavy Malt Whisky).

"Simple products of Scotland, i.e., Scotch Whisky manufactured using common and prescribed methods by Scotch Whisky Regulations in the U.K. ​were complicated just to avoid comparison with similar goods imported," the Indian authorities said.

Pernod in its documents has argued the new codenames were for a "bouquet of reconstituted Scotch malts."

Published on May 27, 2026