Vijay Mallya may still be the King of Good Times in the liquor business. And French multinational Pernod Ricard may have earned unprecedented success by becoming the most profitable liquor player in the market. But when it comes to Uttar Pradesh, both play second fiddle to one man. Mention Gurdeep Singh Chadha, or simply âPontyâ Chadha to them and the tall stories of conquest dip a notch or three.
As a senior executive from the industry told me a few months ago, âPlease keep everything about Ponty Chadha off the record, otherwise I will lose my business in Uttar Pradesh.â He was speaking about the difficulty of functioning in Uttar Pradesh (because of Chadhaâs influence) and how his competitor had trumped him by being the first to sew up a deal with Chadha.
Though he prefers a low profile and rarely interacts with the media, the income tax raids on Chadhaâs properties in Delhi and UP has put the businessman under the spotlight. Many conspiracy theories doing the round on the reasons for the raid. Chadha has probably benefited the most under Chief Minister Mayawatiâs five year rule that is coming to an end. Some say, the raids are an early indicator of the way things are likely to shape up. One thing is certain, if Mayawatiâs fortune does take a tumble and with her Chadhaâs, there will certainly be many celebratory cheers from the Indian liquor industry.
In early 2009, Chadha delivered a coup when the Mayawati government decided that all the liquor in state will flow from his flagons. As the lone wholesaler of liquor in the nearly 10 million-case market, Chadha had the final say on the kind and volume of liquor that other companies could supply to retail outlets in the state. Most important, he also dictated the prices. In other states, where companies like United Spirits and Radico Khaitan canât sell directly to retailers, the local governmentâs wholesale distribution arm does the work. In UP, Chadhaâs common practice was to buy liquor stocks from companies at a discounted price and sell it to retailers for a margin.
Industry officials say that Chadhaâs liquor business is worth over Rs 5,000 crore. The Chadha Group website says: âChadha Group is liqour barron (sic) in this part of the world they have their own outlets as well as whole sale depos in Moradabad.â Not surprisingly, the website has a proud Chadha receiving a trophy from the big baron himself, Vijay Mallya.
Apart from the liquor business, the Chadha family also runs a chain of theatres under the Wave brand, owns hotels and bars and a few years ago ventured into real estate. In 2009, Chadha pegged his group turnover at Rs 6,000 crore. He would have added considerably to that, thanks to the Mayawati largess and expansion in other businesses. It is a typical Indian family business, with Chadhaâs uncle and cousins managing the operations among themselves. But it is invariably Ponty Chadha has remained the lone face of the Group.
All might not be lost for Chadha in case Mayawati loses in the assembly election. Especially if close friend Amarinder Singh leads Congress (I) back to power in Punjab, which is also electing a new state government. Singhâs five year rule till 2007 had done a lot of good for Chadhaâs liquor business. So will it be a Patiala peg or another hand shake with Mayawati for Ponty Chadha? The final twist though would be if Chadha renews his friendship with Mulayam Singh Yadav if the Samajwadi Party chief wrests power from Mayawati. Doesn’t make much sense to have permanent friends or enemies. We’ll drink to that.