Diageo's Indian unit has submitted crucial financial documents to the New Delhi anti-corruption police as part of an investigation into billing and discount practices related to liquor supply to government agencies. The documents, which include bank statements and agreements from 2017 to 2020, are being scrutinized for potential wrongdoing in discount practices. CEO Hina Nagarajan was summoned for questioning on July 26, 2024, but did not appear for the inquiry. Diageo, which holds a significant 19% market share in India's $35 billion liquor market, is facing scrutiny at a time when rival Pernod Ricard has also been embroiled in legal issues since late 2022. [237ab97c]
In a related context, the Karnataka Excise Department is proposing to amend the Karnataka Excise (Excise Duties and Fees) Rules to revise tax slabs for premium Indian-made liquor (IML) brands sold in the state. This proposed revision aims to make liquor prices more competitive with those in neighboring states, following a previous 20% increase in additional excise duty on IML brands across all 18 slabs. The public has been invited to submit objections and suggestions within a seven-day window. Notably, this revision will not affect beer and wine. [3c0fe0c4] [397b329e]
Additionally, the Indian government is planning to impose stricter advertising regulations on liquor manufacturers, including Diageo. These regulations aim to curb alcohol consumption and would restrict the use of celebrities in alcohol advertisements while mandating health warnings to cover 20% of the ad space. Surrogate advertising, where alcohol brands promote their products through alternative means, may also face a ban. The implementation of these new regulations is anticipated in the coming months. [3c0fe0c4] [397b329e]