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Inside story of how billionaires of big-brand pan masala industry got around an ad ban

Despite ban on advertisement and sale of pan masala and gutka, the industry's biggest brands and barons have thrived by using IPL, fancy commercials and Bollywood stars.

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We may not be able to afford fast cars, helicopters or have the gentle sea breeze blowing through our hair but actors Tiger Shroff and Mahesh Babu seemed to suggest that the taste of a successful life can be ours for less than what one would pay for a bus ticket in a recent commercial. The Pan Bahar advertisement — featuring the muscled-up movie stars working out, winning awards and then casually tossing a tin of elaichi that looks a lot like pan masala — has actually gone viral, clocking over 7 million views on YouTube to date. 

Pan masala is among India’s biggest industries, with a market estimated at over Rs 40,000 crore. Behind the success of its biggest brands and the barons who control them, though, is a hidden tale of how the industry drove a hole through a crushing ban, by using elite sponsorships, the Indian Premier League (IPL), and top Bollywood stars like Shah Rukh Khan. From 2011 onwards, all state governments banned the production, advertisement and sale of gutka and pan masala mixed with tobacco, amid rising concerns over their health impacts.

Pan masala is a dried, granular, pre-mixed version of the traditional pan with added colours, flavours, fragrances, crushed betel nut and spices. It is regulated under the Food Safety and Standards Authority of India (FSSAI) as a food product. It can be advertised and sold but it comes with a health warning because it contains areca nut, which is also injurious to health. Gutka, meanwhile, is a tobacco product and is regulated under the Cigarettes and other Tobacco Products (Prohibition, Advertisement and Regulation of Trade and commerce, Production, Supply and Distribution) Act, 2003. It cannot be advertised but can be sold just like liquor. 

The pan masala story illustrates how smart surrogate marketing can get around government restrictions with a product that contains dangerous chemicals and is estimated to contribute to about a lakh cases of oral cancer each year. Most pan masala brands don’t advertise their products, and run commercials of elaichi or cardamom instead, which are free from tobacco, nicotine, areca nut or any other addictive substances. The branding, however, is indistinguishable. 

An ad of Rashree pan masala in New Delhi | Photo: Manisha Mondal | ThePrint

Also read: Man with ready cash, secret compound, ‘odour memory’: Peeyush Jain, who stashed away Rs 177 cr


The pan masala tycoons  

The ‘First Families’ of the pan masala world don’t usually open their doors for journalists—but over the years there have been some tantalising glimpses of what lies inside. In February 2021, at the wedding of Janhavi Dhariwal, daughter of Manikchand Group’s founder Rasiklal Manikchand Dhariwal, film stars like Sharad Kelkar, Jay Bhanushali, Kim Sharma and sportspeople like Leander Paes, Yousuf Pathan and Irfan Pathan were in attendance. Janhavi’s 21st birthday also made headlines in 2004 when her father gifted her a Maybach worth Rs 5 crore — the most expensive car at the time in India. RMD pan masala is a prominent brand manufactured by the Manikchand Group.

In 2017, the wedding of DS Group vice-chairman Rajiv Kumar’s son, Rohan Kumar, was hosted at the Swiss resort town of St Moritz and the entire town had been turned into a “little India for a whole week”, according to local media reports. The popular pan masala brands Rajnigandha, Baba, and Tulsi are manufactured by this group. Five hundred guests were reportedly booked into hotels and celebrities like Pakistani singer Rahat Fateh Ali Khan and Indian rapper Badshah performed at the wedding. About a 100 guests even flew down to Milan for a day’s shopping.   

 

Exactly how much money these businesses generate is hard to estimate, since a good part of it is driven through strictly cash, relatively unknown operators. However, a recent study by market research firm Imarc estimated the market to be worth Rs 41,821 crore in 2021 and predicted that it will grow to approximately Rs 53,081.5 crore by 2027. To compare, the total cost of India’s Covid-19 vaccination programme is estimated to be approximately Rs 50,000 crore.  

An ad featuring Bollywood actor Hrithik Roshan in New Delhi | Photo: Manisha Mondal | ThePrint

But it has not been smooth sailing for the businesses. In December 2021, an Enforcement Directorate raid on Kanpur-based perfume maker, Piyush Jain, allegedly led to the recovery of Rs 177 crore in cash. Jain also supplied to the pan masala industry. There have been a string of similar raids that did not make the front pages — Rs 410 crore was seized from Sachin Joshi of the JMJ Group in January 2022, Rs 150 crore in December 2021 from Shikhar Pan Masala manufacturers and Rs 400 crore was reportedly recovered in July 2021 from an unidentified pan masala group. 

Furthermore, on 8 February 2021, Minister of State for Finance Anurag Thakur responded to a question in Parliament about companies evading excise and customs duty and informed that of 189 cases of evasion, 25 cases (14 per cent) involved tobacco companies and 21 cases were against chewing tobacco producing companies.  


Also read: Army against ‘soldiers’ endorsing pan masala or fairness cream, will vet ads before release


Shady industries 

In industrial areas around Delhi, trucks roll out amid high security in factories run by the pan masala companies. It is difficult to tell what happens inside these production units, which are surrounded by heavy metal gates and guards with walkie-talkies. But at night when the shutters are low, young scrawny teenage boys walk back to their cramped hostels, many of whom get hooked to the product they mix and pack all day. “The machines don’t stop even for a minute,” one of them says. And the formula of the mixture that goes in that tiny 2 gram packet is known to only a few old hands, he adds.  

“Even people who work in close quarters with the owners never get to know about their exact lifestyles. We get a sense of what level of opulence they must be operating at from the way the festivals or family functions are celebrated,” says a former employee of one of the big pan masala brands, who did not wish to be named. 

The Manikchand Group and the DS Group declined to be interviewed for the story despite repeated attempts over call. Shikhar Gutka Group did not respond to requests for comment.   

 


Also read: Never met patient who got cancer from beedi — MPs back ‘Indian cigar’ at RSS-linked event


Brand-building with the stars 

Even though the pan masala market is huge, the competition is fierce. Not only big brands have to fight each other but a welter of small, nimble grey-market operators, running illegal operations out of small factories also dot the country. It isn’t easy to consider a Rs 5 product as aspirational but that’s just what the big players have succeeded in doing. The advertisements speak to the prominent Indian fantasy — big houses, big cars and big money — through big stars. 

There’s a reason, beyond money, that film stars are willing to work with pan masala brands. The product is massively advertised in small towns and villages and helps expand their fan base, explains Anand Kumar, a filmmaker who has shot television commercials for three pan masala companies.  

At a bus stop near Pearey Lal Bhawan, ITO, New Delhi, there is an ad of Rajshree Pan Masala featuring Bollywood actor Salman Khan | Photo: Manisha Mondal | ThePrint

Another major platform for brand-building is the sponsorship of the Indian Premier League (IPL) cricket tournament and other sporting events. Vimal Elaichi and Kamla Pasand advertising is highly visible at several cricket matches. Brands like Rajnigandha have reached out to élite audiences too through film, music and literature festivals as well as media summits. 

There’s growing investment, too, in advertising in exotic locations, a trend also seen in popular films. Television commercials for both Raj Niwas and Pan Bahar were shot in Romania with big crews.   

An ad featuring Amitabh Bachchan and Ranveer Singh near Maulana Azad College in New Delhi | Photo: Manisha Mondal | ThePrint

“If one company gets Amitabh Bachchan, then the other gets Shah Rukh Khan. If one brand goes to Turkey to shoot, the other brand goes to Romania,” says a creative professional who has worked for two pan masala companies. 

Ads by pan masala and chewing tobacco companies are also gaining traction on social media, perhaps in an attempt to target a younger audience. For instance, before the Shroff and Babu ad was released, Pan Bahar sponsored an online contest, inviting viewers to guess which celebrity was going to star in their upcoming advertisement.  

An ad featuring Tiger Shroff and Mahesh Babu at the ITO intersection in New Delhi | Photo: Manisha Mondal | ThePrint

Also read: India’s Tobacco Control Act must be amended, should recognise WHO guidelines, says report


The battle over Pan Masala advertising 

Both central and state governments have fought long battles against pan masala companies in courts. There are at least 200 cases in various courts in India seeking to ban various forms of chewing tobacco and pan masala under the food regulation laws. The companies claim that since the 2011 gutka ban, their products do not contain any tobacco, nicotine or any other harmful or addictive substances.According to them, what they’re selling is food, which is both legal and harmless. 

In kiosks across India, however, pan masala is routinely sold with a small packet of tobacco, which the consumers just mix and eat. “Gutka or pan masala mixed with tobacco made an otherwise inedible substance attractive to a whole new cohort of consumers,” explains Ranjit Singh, a lawyer representing the central government in the Supreme Court in a body of litigation related to pan masala and chewing tobacco. 

“Low costs expanded the reach to the poor consumers,” says Singh. “The nicotine in the chewing tobacco ensured they developed an addiction, and kept on buying.” 

The problem, he explains, has been to provide proof that pan masala companies are in some way complicit in the commonplace practice of selling a small satchet of chewing tobacco along with each packet of pan masala. The government, he says, has found no invoices or other documentation which establishes collusion.  

Tobacco products at a shop in Gurgaon | Photo: Sonal Matharu | ThePrint

Laboratory tests also establish the presence of nicotine, magnesium carbonate and heavy metals. And it is legal to promote cardamom as most companies do — adding another layer of distance between pan masala and the brand-promotion.  

In the hinterlands of Bihar and Uttar Pradesh, where close to 30 per cent of the population in each state is hooked on to pan masala or other forms of chewing tobacco, experts have long pointed to the damaging health impacts of the substance. Areca nut, the main substance in pan masala, causes oral mucous fibrosis — the inability to open the mouth — which can lead to oral cancer. Medical literature also suggests pan masala can cause a number of dangerous conditions, including hypertension, coronary heart disease, leukoplakia and diabetes. 

Just as with cigarettes and alcohol, the government is reluctant to push too hard against a product which is a significant source of revenue and likely impossible to actually ban. While the evidence of negative health impacts of pan masala isn’t hard to come by, it doesn’t have the same negative social connotations of alcohol overuse or narcotics. 

Today’s pan masala magnates with their origins in old-city markets like Old Delhi’s Chandni Chowk began making pan masala on a small scale post-Independence. Although many pan masala advertising casts it as a part of élite heritage, there’s little evidence of it. The product grew out of traditional perfume trade, with producers adding colours, flavours and other ingredients to make chewing tobacco more attractive for new users. 

Faced with the prospect that the state might one day act against their business, many pan masala businesses are also diversifying. Almost all companies sell bottled water, Shikhar Group has ventured into real estate, DS Group is premiering into the FMCG sector and luxury retail and almost all have operations abroad.

(Edited by Rachel John)

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