Indian Regulator Intensifies Scrutiny of Liquor Industry, Pernod Ricard Plant Inspected Amid Broader Investigation
NEW DELHI – India’s food safety watchdog, the Food Safety and Standards Authority of India (FSSAI), last week conducted an inspection at a Pernod Ricard factory in Bengaluru, collecting liquor samples as part of an expansive investigation into the nation’s burgeoning $40 billion alcoholic beverage sector. This intensified scrutiny follows previous actions taken against global giant Diageo, underscoring a significant crackdown on industry practices.
Sources close to the matter, including an Indian government official, revealed that Pernod Ricard was advised to enhance hygiene standards at its Bengaluru facility. Furthermore, the company was instructed to ensure the accuracy of markings indicating the use of recycled plastic on its bottles – a critical aspect of environmental and consumer transparency.
Pernod Ricard, the French spirits conglomerate, confirmed the regulatory visit on Wednesday. In a statement to Reuters, which was the first news outlet to report on the inspection, the company affirmed its commitment to compliance: "Regulatory inspections are an established part of the industry’s compliance framework, and we are working constructively with the authorities." The company further emphasized its adherence to robust quality and safety standards.
During the two-day inspection, FSSAI officials not only gathered liquor samples for testing but also requested various documents, according to three sources who preferred anonymity due to the sensitive nature of the information. Importantly, these sources indicated that the FSSAI has not yet issued any adverse findings against Pernod Ricard following the inspection. The FSSAI itself has not publicly released details of its visit and did not respond to requests for comment.
This inspection of Pernod Ricard comes in the wake of one of India’s most significant food safety crackdowns in years. Earlier this month, the FSSAI sent shockwaves through the industry by banning several whisky and rum brands belonging to Diageo and other Indian companies. The bans were predicated on allegations of improper flavouring additions, a move that prompted Diageo to agree to reformulate some of its popular brands in an effort to reverse the bans in certain states.
Among the samples collected from the Pernod Ricard plant were those of popular whiskies, Blenders Pride and Royal Stag. Pernod describes Blenders Pride as its "top premium blended whiskies in India," while Royal Stag is marketed as India’s first whisky to eschew artificial flavourings.
Diageo’s previous encounters with the FSSAI included issues related to labelling and the alleged incorrect addition of whisky flavour to its products. Additionally, FSSAI officers seized approximately 18,000 boxes of Diageo liquor bottles during a factory visit last week, citing a lack of markings to certify their production using safe recycled plastic.
Pernod Ricard is currently navigating a complex regulatory landscape in India, facing several challenges beyond this latest inspection. These include a substantial $314 million demand for allegedly undervaluing Scotch whisky imports, an ongoing antitrust case, and a separate ban in New Delhi related to alleged liquor policy violations – allegations which the company denies.
This latest action by the FSSAI against a major international player like Pernod Ricard signals a sustained and stringent enforcement approach aimed at upholding product integrity and consumer protection within India’s rapidly expanding alcoholic beverage market. The industry now keenly awaits the FSSAI’s findings and any potential directives that may emerge from this ongoing investigation.
(Reporting by Aditya Kalra; Editing by Alexander Smith)
