What will haunt Haldiram Bhujiawala as a business entity is whether it can keep its brand equity in place with its owner Prabhu Shankar Agarwal sentenced to life imprisonment on charges of attempting to murder a tea stall owner in 2005. Another incident that held Ashok Todi, owner of the Rs 200 crore Lux Hosiery, as one of the prime accused in the murder of Rizwanur Rahman, dealt a great blow to his business because people, especially in Kolkata, started loathing the brand. The same might happen to Haldiram Bhujiawala, the Rs 500 crore snacks chain.
Haldiram brand savouries, found on the shelves of retail chains like Carrefour, Sipneys, Tesco and Sommerfield in around 40 countries, trace their origins to Bikaner in Rajasthan, where Gangabishan Agarwal started a bhujia and sweet shop way back in 1937. The enterprise gradually spread its units across the country. In 1958, the company Haldiram Bhujiawala was founded with its headquarters in Kolkata. In 1999, the business was split into three separate entities ?Haldiram Manufacturing with its base in the national capital region to serve the north Indian market, Haldiram Foods with its base in Nagpur to serve the entire west and south Indian market and Haldiram Bhujiawala with its hub in Kolkata to serve the entire eastern market. Company insiders say that Prabhu Shankar, who took charge of managing the headquarters in Kolkata, was the key player in the split. Although the three units had clearly defined boundaries in pen and on papers, in practice the three companies competed with each other in both domestic and international markets.
In the face of such cannibalism, Haldiram Bhujiawala got enveloped in a number of controversies. Its brand image started falling and sales were affected. Prabhu Shankar once got arrested for manhandling a customer. He had to deal with problems created by spurious products. Then, one Anil Kumar Agarwal claimed that he belonged to the Haldiram family and used the Haldiram brand and named his company Haldiram Madanlal.
Now Prabhu Shankar is charged with conspiring to murder. The fast track court of Justice Tapan Sen has sentenced him to life imprisonment. Though he has the opportunity to plead not guilty in a higher court, all these proceeding may translate into a heavy damage to his business. On January 29, the day when Justice Sen announced his verdict, the snacks baron said that his business had already suffered during the trial. He pleaded for leniency, arguing that he was fending for a ?thousand families?.
If Prabhu Shankar?s High Court plea doesn?t work in his favour, he would surely consider moving the Supreme Court for a favourable verdict. Meanwhile, it would be hard for Haldiram Bhujiawala to protect its business territory from Haldiram?s Delhi and Nagpur operations. Then, other Kolkata-based upcoming brands like Bhikharam Chandmal and Tewari, who have adopted the Haldiram format, would also keep eating into the Bhujiawala space.
The very fact that one of the Haldiram Bhujiawala owners is involved in a murder case might put pressure on the entire brand. But operators based in Delhi and Nagpur would marshal every effort to draw a clear distinction between their businesses and the business of Prabhu Shankar. These contenders are likely to eat into Haldiram Bhujiawala?s overseas market as well.
Recap: Prabhu Shankar Agarwal wanted to set up a second multi-storied food mall in Kolkata. So, he wanted to remove a 9 sq ft tea stall that was in the way of his venture. The stall was located next to a swank Haldiram eatery in Posta, which is Kolkata?s as well as eastern India?s prime commodity market. According to the police, Prabhu Shankar offered the tea stall owner Satyanarayan Thakur Rs 4 lakh to move. When Satyanarayan refused to move, Prabhu Shankar gave a supari to Gopal Tewari to kill Satyanarayan. On March 30, 2005, Tewari barged into the tea stall with his henchmen and opened fire. Satyanarayan narrowly escaped the attack, while his nephew sustained injuries on the leg.