Ponty Chadha- Baron of Booze

When it comes to the liquor business in Uttar Pradesh-- both the King of Good Times and Pernod Ricard, play second fiddle to the one and only Gurdeep Singh Chadha. Election results may re-draw some of the equations in the state.

Prince Thomas
Published: 02, Feb 2012

Despite the seemingly royal linkages of my first name, I like to see life from the back bench. While studying it helped when lectures were unending but later I realized it also worked as a corporate reporter. It gives a clear view of both the performer and the viewer; of the 360 degree perspective and the minute detail. Now while tracking the world of business for the pages of Forbes India as Senior Assistant Editor, I will use this space to share what I observe from that rear seat.

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 ‘Ponty’ 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, “Please keep everything about Ponty Chadha off the record, otherwise I will lose my business in Uttar Pradesh.” He was speaking about the difficulty of functioning in Uttar Pradesh (because of Chadha’s 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 Chadha’s 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 Mayawati’s 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 Mayawati’s fortune does take a tumble and with her Chadha’s, 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 can’t sell directly to retailers, the local government’s wholesale distribution arm does the work. In UP, Chadha’s 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 Chadha’s liquor business is worth over Rs 5,000 crore. The Chadha Group website says: “Chadha Group is liqour barron (sic) in this part of the world they have their own outlets as well as whole sale depos in Moradabad.” 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 Chadha’s 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. Singh’s five year rule till 2007 had done a lot of good for Chadha’s 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.

  • Kristiaan Helsen

    Saw story in the Herald Trib today. Apparently he came to a brutal end; murdered by his younger brother in a shootout at his luxury farm.

    on Nov 20, 2012
  • Just How Powerful Was Ponty Chadda? |

    [...] 4. Ponty was a much feared man. One industry executive, in an interview to Forbes magazine, categorically stated that if he said anything negative about Ponty, his business would be shut down in UP. You can read this here:  http://forbesindia.com/blog/business-strategy/ponty-chaddha-baron-of-booze/ [...]

    on Nov 17, 2012
  • sanjeshdhall

    its all about opportunity chance .and then catch hold to sow and then to have fruit of sowed seed.

    on Mar 12, 2012
  • Tejinder Singh

    I had an got an opportunity to seen this guy. Simple..(Traditonal Kurta pajama)..very Humble. Simply Genius brain

    on Mar 10, 2012
  • Ashutosh

    Where are the details? Poorly written article, especially for a business focused magazine.

    on Feb 5, 2012
  • Gurbir S Khera CMA

    Simply a great case study for B-school graduates who are looking for quick-fix solutions. This story could also inspire would be entrepreneurs negatively...all the so-called wrong-doings, unethical behaviour...is being rewarded and glorified to the hilt...!- management educator-Prof Gurbir S Khera

    on Feb 2, 2012
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