Diageo plc, the British multinational alcoholic beverage company and a leading distributor of Scotch whisky and other spirits, has complied with a request from New Delhi’s anti-corruption police by submitting financial documents related to an ongoing investigation. The inquiry centers on the company’s billing and discount practices involving government agencies in the Indian capital.
The investigation specifically targets Diageo’s Indian subsidiary, United Spirits, and its CEO, Hina Nagarajan. Nagarajan, who also serves on Diageo’s global executive committee, was summoned by New Delhi police on July 26 to provide documents related to the company’s supply of liquor to government-operated alcohol shops and the payments received from the city between 2017 and 2020.
Although Nagarajan did not appear in person, Diageo representatives submitted the requested documents shortly after the notice. According to a source familiar with the matter, the documents included bank statements, records of financial transactions with Delhi city agencies, and agreements related to the liquor supply. The source, who spoke on condition of anonymity due to the sensitive nature of the investigation, shared this information with Reuters.
Neither Diageo India nor the Delhi anti-corruption police responded to repeated requests for comment from Reuters. However, Diageo has previously described the investigation as a “routine information and fact-finding exercise” and expressed its commitment to cooperating with the authorities. The company also hinted that similar notices might have been issued to other manufacturers.
The Delhi probe is focused on the procedures by which companies like Diageo India supplied liquor to government-run shops, particularly the discount practices tied to early payments by these agencies. Investigators are scrutinizing whether these discounts complied with local liquor laws or if there was any wrongdoing in the process. Diageo India’s CEO was called as a witness in the ongoing investigation.
The Indian capital is a key market for premium liquor brands, making the outcome of this investigation particularly significant for Diageo. The company holds a 19% market share by volume in India’s $35 billion alcoholic beverage market, according to estimates by Euromonitor, making it the largest player in the industry. This dominant position is further highlighted by the struggles of its main competitor, France’s Pernod Ricard, which has been unable to retail its products in Delhi since late 2022 due to its own legal challenges.
The probe into Diageo’s practices comes at a time when the Indian government is increasingly tightening its oversight of the alcohol industry, particularly in major urban centers like Delhi. The city’s strict regulations mandate that all liquor retail shops must be operated by government agencies, adding another layer of complexity to the business operations of multinational companies like Diageo.
