Memoirs.....Musings of a sales guy at heart.....

Episode 36...

The then MD of TASMAC Soundayya was very courteous and always there to listen but he could not do anything.

So the 'knocks' went on and on....meanwhile, the trick played by Samsudeen worked out very well for SAFL for two reasons...1) This is one new brand from SAFL at a very attractive RSP with a decent presentation and 2) Between August and December 2011 there were no new brands in the market and Samsudeen exploited this fully taking this brand to 100k cases per month almost.....Our bottled stocks of 3300 cases were as is where is condition at the warehouse of SAFL....Bardinet's Patric paid a visit to SAFL and saw with his own eyes our plight....

We started using our available resources to push Hobsons across UT of Pondy, AP (unified then), KTK and Goa....but the volumes from these places were not in line with our efforts....our business model was TN centric....

I used to spend lots of time with Samsudeen in his office and I always found him warm, hospitable and discuss in details many a things. But there was another part to his which was the real HIM which we figured out later....The meetings with him would last for few hours always and if it was lunch time he would order for me too...from the kitchen on top of his office which was primarily kept for Maran. 

Maran also appointed an ex bureaucrat, Mathew, as the ED of his company...he was very nice but helpless when it came to doing something for us.....Augustine the head of legal then, Mahadevan the CFO then and many others....the company was run by a board and they were reporting to Maran but Maran always took the final call...the launch of VSOP Gold made their bottom line very good and Samsudeen exploited it to his advantage....which is absolutely the way it should be.....

We worked very hard to improve Hobsons in KTK, AP, UT and Goa but these markets had very little potential for this Super Premium Brandy....In UT of Pondy we expanded the distribution across Pondy, Yenam, Mahe and Karaikkal but the volumes were very small except Pondy....there was an issue with the excise policy where the super premium was charged very high. I met the Commissioner in a get together and told him the USP of Pondy is the price of liquor but that was getting eroded with the huge duties on premium brands....the tourists from TN and Blr who flock Pondy during weekends and holidays do not drink cheap liquor....they go for premiums and also brands which are not available in TN....of course they are also price conscious as the rich go for Black and cognac and not made in India....he agreed and asked me to meet his deputy, Anbazhagan who was the DC then...Anbazhagan was known for his clean hands and I explained to him why we feel the duties are high for premium brands....and he had the CMs ears too...it was Rangaswamy the CM of Pondy then.....after a couple of meetings he got convinced and he made some alterations in the additional duties for super premium brands and thus the MRP of Hobsons came down a bit..am sharing this with you as there are, at times, good and clean officers who, when presented with logics and revenues, not only listen but also take efforts to convince their bosses to change things for the betterment of the state and its revenue....

We developed Clovis and the product and presentation came out very well....Sudeep did lot of ground work on the blend in terms of research and then we ticked the blend...and also started bottling the same at Gemini Goa....and dispatched first consignment to Pondy as mentioned in my earlier post....the consignment reached Pondy just a day or two before 31st of December 2011....

Meanwhile in TN, beginning of December, there were some major headlines and Natham Visvanathan, minister of excise was made the Chairman of TASMAC too....first time a politician was appointed as Chairman-it was always the Home Secretary who was Chairman of TASMAC....We were supposed to go to Colombo along with Nalin and Sridhar and spend some time with Amar who was managing the franchise of KFC and Pizza Hut in SL....we booked the tickets too but last minute I backed out as I sniffed something good is likely to happen in TN for us....I went and met the home secretary who was the chairman of TASMAC and he also told me things are getting materialised.....so there was something about to happen....

Around 27th when I went to meet the MD of TASMAC he told me to meet immediately the minister and present our case....which I did immediately...there was lots of difference between my first meeting and this time when I met the minister....first time he expressed his helplessness and this time he was full of confidence....he okayed our entry and on 31st of December I got a call from Raju of GV that they are releasing their new brand order that day....(Golden Vats moved the court against the partial treatment meted out to them by the government that time)....I rushed to TASMAC around 3 pm and Raju was sitting there...I met the MD and he also told me the order would be released but in the next couple of days...the episode of August 11 appeared in my memory and I pleaded with him that he should consider releasing our first order that day itself...TASMAC had fewer staff that day as it was 31st Dec but I didnt relent...I even told him that if he is okay that I would extend any secretary services to him for which he laughed and asked me to wait....the time was ticking.....I had only Rajeev in the office....I asked him to come to TASMAC....Around 6 pm Raju got his new brand order and mine was still happening.....I went and pleaded with the guy who was preparing the order....guys pl note that Geoscope was not an entity...it was SAFL.....but I was pushing hard....that evening the NY party was scheduled at Krithis house in Chennai with all our friends and families meeting up there....and MD told me that he would sign the first order and leave....around 7 pm our order got released and Rajeev picked it up from the section and handed over to me....I thanked the MD big time and also Raju who gave me this info....I rushed to Kapali temple, thanked him profusely, bought some sweets and rushed home.....my neighbor that time was Vijay Sheth, a Gujarati and we became great friends...he knew everything on our business front and tried thru his contacts thru for a break through...around 3 to 4 months time in 2011 I stopped taking sweets and told myself I would eat only when the first order is on hand...this Nandini, Vijays wife was well aware of....when I entered home around 730 or so, she came rushing with some home made sweets for me....every one felt so happy for us as my close circle knew what we were going thru.....and we rushed to Krithis home with the order copy and a bottle of Hobsons....Manu, Krithis wife made a rongoli at the entrance with all Green (the color of Hobsons then)....we really celebrated that night as it was a major relief and 'we have arrived'......Sudeep and Vishal celebrated in Blr and Nagpur respectively....

1st was a holiday and I think 1st was a Sunday....Viswanathan our ASM for TN was in Mahe and coming back to Chennai on 31st Dec and he got so excited....

We looked at many options for distributing our brands in TN but I felt ( i will take the blame) that if we give the distribution to SAFL it would help us as they had a big team and they had no competing brands)....I discussed this threadbare with Samsudeen and told him we would do a briefing to the SAFL sales team on 5th as by the time the dispatches would have been completed....We have to also provide to SAFL advance for excise duty and the consignments are combined with theirs as Hobsons initial orders were spread across almost all the depots and some of the depots it was just 10 or 20 cases only.....we didnt realise then it would become a huge thorn for us....

We appointed RSEs in Madurai, Coimbatore, Trichy and Chennai to oversee the SAFL team with Vishvanath to supervise the entire operations.....Vishwanath is the brother of Rajashekars wife....and incidentally Rajashekar aka NRR and Samsudeen were colleagues for over 2 decades in Shaw Wallace and NRR was reporting to him and they were like brothers.....but Samsudeen fell off with NRR as when he asked NRR to join him in SAFL during his initial stint NRR turned it down and he stopped talking to him....NRR went to his home to invite him for his first daughters wedding along with his wife but our friend sent them off without even showing his face (!).....this story I heard from NRR though it is his side.....

5th was our scheduled meeting with the SAFL sales team. Manohar was their ASM for TN who happens to be my colleague from HL...a street smart guy....

On 4th evening I got a call from Samsudeen....he asked me straight whether NRRs brother in law was my ASM for TN and I confirmed it...he told me, believe me guys, that he would not allow him to enter his office and if he is going to be our ASM they will not distribute our products....The great Samsudeen....spent decades in Shaw Wallace and then in USL after USL bought over SW and later in other companies...also did a executive MBA in Harvard.....had the audacity to say this to someone whom he considered as friend and whom his company has tied up for bottling.....how one should react to this utter nonsense....I tried convincing him but he was curt on the phone and hung up.....I smelt the venom in him directly the second time....the first time was just a few days before our first order when I showed him Clovis....he eyes turned colorless......I could see the jealous oozing out......this is the second time....We had just two options....1) to tell him #### off and appoint our own team or another promoter and the 2nd was to manage for the time being...we took option 2 as we didnt have enough time....

So I went to their office next day to do the briefing....He told Manohar that he should not give me more than 30 minutes....and as expected the partnership to distribute Hobsons didnt work out well and we have to severe our distribution arrangement with SAFL....

But this is just the beginning of the bigger game this man hatched in his mind...I wanted to abstain from saying bad about anyone in my blogs of my life but this one and also a couple of more, I decided to share with you for you to know how people change their colors despite being known for ages and being part of the same industry....

Since that time it was just Hobsons we decided to go with a distributor-in TN the distribution is done by TASMAC but someone has to do all the follow ups and hence we call them promoters.....

Meanwhile we have to say bye bye to Vishwanath-nothing to do with Samsudeen's episode though-and we recruited Jai Mohan....he had worked in the industry earlier but I think it was either in CBE or in some parts of Kerala....Sudeep was very convinced this person would be ideal fit....so we appointed him as our ASM...soft spoken and non controversial and built good relationship with TASMAC....

Hobsons was becoming popular across TN especially in the cities....Chennai was topping the chart. TASMAC goes with some formula where the first 3 months, if you manage your logistics well, the brand can become big/decent, based on the price segment its in....we did well with the first 3300 cases and to our surprise the nip pack started doing very well. We consciously didnt go with pints as we didnt want to invest in another pack with MGQs...Places like Madurai and Tirunelveli the movement of Nips was heart warming....I have started conducting the brandy appreciation sessions across cities and also in many Rotary clubs in every city...We also conducted one session exclusively for the media and got fantastic coverage. Rajeev did a great job in getting a very good presence of most of the top media groups. The coverage given by Express, Chennai edition gave us the required impetus....but the problem started with SAFL not giving us the production line when we wanted....

SAFL has allotted a particular line for us which was 'Semi automatic' as our production cant be run on automatic due to packaging intricacies....and with the best of work force we could do around 800 cases of nips and around 600 of qts....but we never had skilled workforce for our lines and we always had problem with something or other...One day Samsudeen called us to the office and told us since their productivity falls when the bottle Hobsons, the bottling fee to be increased.....we are at their mercy and have to agree....okay you got better bottling fee...an example here...if one is paying X as bottling fee in any other parts of the country, in TN it is X x 3 or 4 plus deposits...I still do not understand why someone has to pay any deposits with the bottler in TN as the entire invoice amount is paid to the bottler and the label owners are at their mercy to get their invoice values....the bottlers mostly do not pay to the label owner upon receipt of the payments from TASMAC....and TASMAC is one of the best paymasters in the country for local bottlers...they pay 50% of the invoice value with in 3 to 4 days of dispatch once the delivery challan is submitted and the balance payments with in a maximum of 15 to 20 days....but we the label owners have to follow up with the bottler for our payments...SAFL was one exemption as we never had any problem with them in collecting our dues....

When TASMAC released the second order in the 4th week of January, despite our having all the materials at SAFL, Samsudeen put pressure on the unit and they refused to provide us the production line.....this problem we encountered very regularly.....frequent meetings with Samsudeen and manufacturing and with Mathew could not get us the desired outcome....Maran was operating from Singapore and was not available in Chennai....and Samsudeen's defence was that they have to first complete their requirements and only if there was a window they would allow us to bottle....and the unit was an old one and they had a licensed capacity of only 4.15 lac cases per month....they somehow didnt bother or just lack of understanding, to go for additional capacity.....so we have to keep praying and begging for our production and we lost the first 3 months window given by TASMAC....meanwhile, we were also pushing for Clovis to be bottled and Samsudeen refused point blank...it was not that they had any new brands....but he didnt want to honor his commitment.....So I took it up with Maran who was in Chennai for a review.....this episode we cant forget....we came to know Maran was in town and told his secretary that we need to meet him and he asked us to come in the evening....when we went there in the evening we were told that he had called us for dinner and he would call us once he arrives in the guest house....we waited and since nothing happened till 930pm, we decided to for a movie and around 1130 we got a call from his secretary to come down....Maran is a great host and takes care of the guests very well....I took him aside and briefed him on our plight and how Samsudeen was taking our trip...also told him that our materials are lying at the factory and we need to get our Clovis bottled and agains Samsudeen has not been letting this happen...mind you guys, Samsudeen was only head of Sales and marketing but nothing to do with manufacturing....but he somehow managed to wield his power by terrorising them showing all the pending orders.....and to be fair to him he was protecting the interest of his boss but failed in his duty that his boss has signed the bottling arrangement with us....Maran also knew that his own brands have started doing well and his interests are well protected but at the same time he wanted to help his friend Rajah....but we felt he didnt convey this clearly to Samsudeen and he exploited this.....Samsudeen got the message from Maran that Clovis should be introduced and he didnt like it one bit as he thought he had stopped Clovis.....but he had to go with his boss's commitment and very reluctantly he allowed us to launch....we went ahead and launched Clovis....again a great looking product and with fantastic blend....fantastic response.....

Meanwhile, Pondy received the first consignment end of December 2011 but on 31st of December Pondy was devastated with Cyclone Thane.....We lost few days because of that and launched just a few days before Pongal 2012....great response from Pondy and KKL.....

Our problems become worse in TN.....it was a struggle everyday in TN between us and SAFL.....

I will be changing tracks in my narration but would always connect the dots....so bear with me please.... 

Meanwhile, we felt (we here are self, Sudeep and Krithi), we should do something and look at other options in TN....

I need to mention here about our dear brother Kumar...known as McD Kumar.....During my IDV time, I offered him a job as TSE in Kerala and he was working for McD then...but he didnt join....and later I got him in to Moet Hennessy when Ashwin was the boss.....and Kumar has been a great source for me....during my Flemingo days when I was helping a new entrant in TN, Kumar prepared the entire financials for that company and I convinced the boss of the company to absorb him as head of sales which they did..also I got Thangavelu, from ABD to head their manufacturing.....but I had fallen off with that boss and later started Geoscope....Kumar continued with them for some time and later joined with SNJ and then moved to Accord...Kumar was an enterprising guy and always their to extend a helping hand to me especially...he was like a younger brother....but Covid snatched him away from us....

There is another friend in Meganathan....this person is more of a PR guy and was a freelancer....during our initial time when we struggled to get our Hobsons liquid, he tried to help us too....he called me once and said he would set up a meeting with Jayamurugan of SNJ to bottle one of our brands....Jayamurugan, got his bottling and beer manufacturing license when DMK was in power and learnt the business quite fast....he was novice in the business when he started...he tied up with Radico for Morpheus and also roped in Bacardi...we tried to bottle SMV with him but that got shelved....Sudeep had a great equation with him from his Bols days and also his manufacturing head, Sakthivel Samy.....We met up with Jayamurugan along in the presence of Meganathan....by this time, I think it was in 2013 beginning, Jayamurugan learnt the tricks of the trade using all his muscle and almost managing a volume of more than 600k cases per month....he launched British empire cross line with Morpheus and Bols and his team started exerting maximum pressure on British Empire (dont know what British has to do with Brandy) at the cost of Morpheus and Bols....TASMAC changed their ordering pattern and instead of issuing brand wise break up to the bottling units, they allowed the manufacturers to use their discretion....this was a flaw in TASMAC ordering...this has allowed companies like SNJ and SAFL to tweak around and push in their own brands at the cost of their bottling partners brands....and SNJ (Jayamurugan) changed his business model from bottling fees to royalty.....a %age of the EDP (ex distillery price)....and no guarantee for any volumes....and also deposit for duty payments....we deliberated this but needed the volumes to keep us floating....we got our 3 brands registered with TASMAC as mentioned earlier....and hence we decided to shift Le Roi' brandy to SNJ....as it would be easier to shift a brand than go for a new brand which means one has to go thru the same rig morale again.....SNJ got LR shifted to his unit and we launched LR thru SNJ with his team involved in the distribution....in hindsight, we should not have given the distribution to SNJ as we figured out later, they didnt bother much about LR and kept coming back to us with issues after issues.....we launched LR in Pondy with the mono carton on all three packs but in TN due to low margins, we had the mono carton only on qts...we had a honeycomb design on the bottle and it was in the neck of the bottle....we started getting complaints that the honeycomb area on the bottle started attracting dust as the TASMAC outlets were open to dust and the stocks were never kept well and also dusted off....TASMAC, I think in 2014 or 15 only started the elite outlets but in terms of numbers, these were very less compared to the size of the universe and the drinking populace and foot fall at the outlets.....and we had very minimal say in which outlet the stocks should be supplied and which should not.....and if your stocks are stuck over 90 days either in the depots or in the retail outlets TASMAC would debit you demurrage charges which are calculated per day per case....and can run in to lakhs.......do we have a role in controlling this.....I would say very less....if you are a local bottler you can still manage and control but people like us do not have much say on this as we are totally dependent on our local bottling partner.....(sad, isnt it?).....

We had a very considerate and a great listener in Soundayya MD of TASMAC....he had also tried to convince Samsudeen to help us out but Samsudeen was very adamant....we were getting with great difficulty 1000 to 1500 cases per month from SAFL both our brands....we also faced issues as we have to combine our brands with that of SAFL.....and most of the time SAFL cited this as the reason and never indented our brands while submitting their requirements to TASMAC.....It was like waking up to new issues....

We reduced our FF and appointed a promoter...this promoter was doing Mansion House and Anand of Happy wines set this up in TN to manage MH business thru Elite distilleries...(Accord).....The person who was managing was a guy called Kumar an ex banker and a wonderful guy....he didnt know anything about alcohol but learnt the rope fast but this set up didnt work for us as they were not able to live up to their commitments and finally we have to revert to our own team...we went on a recruitment drive and Jaymohan managed to get it in place in a very short time possible....great work....We thought between our 3 brands if we get 10000 cases (which was possible) we can stabilise our business and turn it around....but the same issue continued for us.....supply....supply....supply......struggling for stocks....LR became a liability for us due to initial negligence of SNJ and the volume started coming down....Hobsons and Clovis were struggling due to lack of supplies.....

We started getting desperate in TN and this led to a disastrous move by us and by me as the leader of the team.....

more in the next episode......