HEINY vs. PRNDY: Which Stock Is the Better Value Option?
The maker of Chivas Regal and Absolut vodka is the second-largest spirits company globally and in India. It accounts for 17% of the alcohol market by volume in India, where it competes with the likes of Diageo, IWSR Drinks Market Analysis says. Pernod has since last year been under the scanner of India's Enforcement Directorate as part of an investigation into how retailers, manufacturers and politicians allegedly colluded to illegally profit from the 2021 auction of liquor retail licences in New Delhi.
Pernod Ricard violated the liquor policy of India's capital city by financially supporting retailers who in exchange stocked more of the French company's brands and boosted its market share, the country's financial crimes agency alleges. India's Enforcement Directorate said in court documents filed in November that Pernod India provided corporate guarantees worth 2 billion rupees ($25 million) in 2021 to its banker HSBC and then asked it to facilitate loans to retailers, who used the funds to bid for liquor store licences in New Delhi. The Delhi government's policy prohibited manufacturers from participating in retail sales directly or indirectly and Pernod was "in contravention" as it effectively used bank guarantees to invest in retailers, said the documents, which were reviewed by Reuters.