A grandson of India's original beer king NN Mohan, who established Mohan Meakin Ltd sixty years ago, has sold his brewing asset in Uttar Pradesh to Ponty Chadha, one of the most influential liquor barons in the country currently. Chadha's latest buy comes months after he completed acquiring UBIO distillery in Aligarh from the listed Uflex Ltd.
Ponty Chadha Group, estimated at over $1.5 billion, partnered with local distributor Tilak Raj Sharma to buyout the troubled Mohan Goldwater Breweries in Lucknow for an upfront payment of Rs 14 crore apart from assuming debts on the company books. The Rakesh Mohan owned brewery can produce 1.25 lakh cases of beer every month.
Rakesh Mohan's father Colonel VR Mohan was the eldest son of the founder, and he had succeeded him as Mohan Meakin MD before his untimely death.
"I have acquired the brewery along with Sharma. We will run it as a joint venture. I am also building a greenfield brewery, with monthly capacity of 5 lakh cases, at UBIO distillery complex. Once that is completed, I will look at launching some brands of our own," Chadha, whose real name is Gurdeep Singh, said, when contacted. While deal is not a significant one by value, the sell-out by a Mohan Meakin scion is illustrative of the changing landscape in the country's alcoholic beverage industry, and puts the politically networked Chadha in limelight once again.
Rakesh Mohan had moved out of the Mohan Meakin family with the brewery, as realignments took place in the third generation beverage and food enterprise. He pursued other business interests in food and hospitality and has no stake in the current affairs of Mohan Meakin Ltd.
The acquisitive Chadha, whom Uttar Pradesh Chief Minister Mayawati appointed as wholesale distributor for alcoholic beverages in the state, has been building an integrated alcoholic beverage enterprise straddling from sugar mills to distilleries and breweries to brand distribution. Extra neutral alcohol (ENA), used in the distillation of Indian made foreign liquor, is mostly made from molasses that is a by product of sugarcane. The control over privatised sugar mills gives him access to molasses, which exhibits heavy price volatility, often bleeding even the biggest players in the spirits industry.
The 56 year-old Chadha directly and indirectly influences the liquor trade in Punjab, Chandigarh, Haryana, Uttar Pradesh, besides having operations in Uttarakhand and Chhatisgarh. Chadha operates large distillation plants in Punjab, with his family building a large brewery there as well. In 2009, media reports pegged his enterprise at over Rs 6000 crore in size by quoting the man himself.
Apart from being a bulk supplier of spirits, Chadha has dabbled in marketing whiskies such as Hedges & Butler and Silver Peg in technical collaboration with Scotland's Ian MacLeod.
The diversified Ponty Chadha Group also plays in real estate and power, besides owning paper mills.
Mohan Meakin Ltd is a group of companies that dates back to 1855, when Edward Dyer established Asia's first brewery at Kasauli. It later merged with HG Meakin breweries, and the combined entity known as Dyer Meakin Breweries was listed on the London Stock Exchange. In 1949, NN Mohan acquired the enterprise and expanded it with new breweries in Lucknow, Ghaziabad and Khopoli. Renamed as Mohan Meakin, the company powered its way in the Indian market through the 60s and the 70s with several market leading brands such as Old Monk Rum, Black Knight and Solan No.1 whiskies.
Over the years, MML became more pronounced as a spirits company despite building newer breweries in the south and continued to sell beers like Lion and Golden Eagle. Five years back, the company had appointed PwC to explore a strategic sale of its brewing assets but the process did not reach any conclusion.
The Indian alcoholic beverage market is getting consolidated with the new age tycoon VIjay Mallya's UB Group dominating both spirits as well as beer markets. MNCs Pernod Ricard and SABMiller are challenging his dominance even as traditional rivals like Mohan Meakin and Jagatjit Industries lost significant ground in the last two decades.
Players like Ponty Chadha, who emerged from liquor trade, are tapping the large market for economy brands as the industry is chugging along in robust digits in the world's second most populous country.