French alcoholic drinks maker Pernod Ricard, which is relying on Asia to drive growth, has told India that a dispute with tax authorities was threatening its investments there.
The long-running fight over imports of alcoholic beverages has progressively worsened since it began in the 1990s, the company said.
Pernod shares fell 1.8% on the news in morning trade, underperforming peers, and closed flat in Paris.
The maker of Chivas Regal, The Glenlivet Scotch whisky and Absolut vodka is lobbying Indian authorities, including Prime Minister Narendra Modi, to resolve the matter.
“This ever-lasting litigation has been a big strain on our ease of doing business and has inhibited fresh investment by our group headquartered in Paris for expansion of business in India,” Pernod wrote to Modi’s office.
“These tax disputes initially arose in 1994 in import valuation by the customs authority, have compounded year after year and are still ongoing.”
Pernod, in a statement to Reuters, said it has been in “continual dialogue” with Indian authorities as it looks at finding “a swift resolution to this long-standing matter”.
Pernod’s stance over the tax dispute casts a shadow on future growth of the company in a region it says is among its “key strategic markets”.
It expects India and China, the world’s two most populous nations, to drive most of the alcohol industry’s growth in the next decade.
- Reuters, with additional editing by George Russell
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