Why Pan-Masala Companies Are So Rich ? | Pan Masala Business Model | Case Study

Today, in Delhi’s industrial area, there are factories with big metal gates surrounded by walkie-talkie guards No one knows what’s going on in these factories But when their gates open at night, small kids come out to work Yes, you heard it right. Kids work in these factories One of these boys tells us that machines don’t stop even for a minute in these factories A mixture is prepared, which is put in a 2 gram pouch and sold in the market If you look at these pouches, they look like a regular toffee or mouth freshener
But in reality, death is written on these pouches I’m talking about Paan Masala And the most surprising thing is that today, this thing is openly promoted by big celebrities You’ll see banners, you’ll see different TV ads Despite knowing that this thing causes dangerous diseases like cancer Why is this thing being openly promoted? Who are those people who are not letting it be banned despite a million attempts? What is the truth of this Paan Masala industry? We’ll find out in today’s Blog. Tobacco is harmful to health, but many people still consume tobacco The Delhi government has banned Paan Masala for a year I’m tired of eating Paan Whenever we hear about deaths caused by tobacco, we think of chain smokers and cigarettes But the truth is that this is just the tip of the iceberg Because the real problem today is smokeless tobacco Which is used in Zarda, Gutka, Khaini, Paan Masala Very few people know this But today, only 14% of the tobacco produced in India is used in cigarettes The remaining 38% is used in cigarettes

And the most tobacco is used in chewing tobacco products Which is 48% And today, 70% of the smokeless tobacco used in the world is used only in India And this is the reason why 90% of the cancers in India are oral cancers Because of this smokeless tobacco, more than 2.5 lakh Indians have to lose their lives every year But there is a big question among all this If chewing tobacco is so dangerous, why doesn’t our government ban it? In fact, let alone ban How are the big celebrities of our country able to promote these products so easily? And why is it that the government is not taking any steps to stop them? You will be very surprised to know this But today, from big politicians to businessmen Everyone wants to sell you this poison To understand why and how this is done, we have to go back in time The culture of chewing tobacco in our country Was started by Mansukh Bhai Kothari Who is also known as the father of Paan Masala Industry He was born in a Gujarati family And just like a Gujarati’s mindset is that of a businessman.
Similarly, he also started a small business at the age of 23 At that time, our country was newly independent If I tell you the exact time, it was the year 1948 And at that time, Mansukh Bhai used to sell hair oil from one shop to another in Kolkata But whenever he used to come back from Kolkata to Gujarat He used to come back with cigarettes Which he used to sell in Kanpur Then slowly, as time passed Mansukh Bhai started selling coconut oil in tin boxes Now for many years, this oil business continued And theyear comes to 1973 When Mansukh Bhai started Paan Parag with Rs. In the beginning, Paan Parag was a Paan Masala product Which was made using Betel Nuts, Cardamom, Lime, Catashew And some natural perfumes At that time, Paan Parag had no relation with Tobacco In fact, when Mansukh Bhai launched it It was brought to the market as an alternative to Paan That’s why it becomes a very popular product in our country in a very short time Because from that time till today Paan is used in India’s weddings, festivals, pujas Almost everywhere, it is used as a mouth freshener In fact, the significance of Paan can still be found in many Indian scriptures In these scriptures, social, cultural, religious Even in day to day life The importance of Paan leaves is mentioned everywhere This was the reason that with the launch of Paan Parag Paan Parag proved to be a super hit product At that time, Paan Parag used to come in a 100 gm round tin box In which they used to give a spoon as well This is about 1970 At that time, even a small spoon was a big innovation Because before this, no one had even thought That Paan Masala can be sold as a product At that time, there was no internet Very few people used to read daily newspapers And products like Radio and TV Were found only in the houses of rich people But people like Paan Parag so much That it became very popular with the word of mouth publicity Now seeing this popularity, the local Paan shops They also started keeping the boxes of Paan Parag in their shops Which made this product even more popular Then to make this business even bigger In 1983, Mansukh Bhai launched the first TV ad of Paan Parag After which, for the next 5 years So much marketing of Paan Parag was done That from 1983 to 1985 This product became India’s most advertised product The company ran an ad Whose slogan was Welcome Indians with Paan Parag Because Mansukh Bhai’s vision was To make Paan Parag reach every house in India The company’s goal was The actual Paan which people buy from Panwari People should replace it with Paan Parag But there was a problem That making Paan Parag reach every house in India Was not that easy Because India was still developing And forget about that time Even today, for the maximum number of people in India The tin box of Paan Parag Is no less than a luxury Now to fill this gap In 1985, Mansukh Bhai Along with the tin box of Paan Parag Started selling it in small pouches He launched a sachet of 5 grams Which every Indian could afford And as soon as this small packet launches The market goes crazy Because this was the place From where a new industry was born Smokeless Tobacco
Industry Now seeing the success of Paan Parag In the 1990s Many players started taking entry in this market And seeing this, Paan Parag Realised that normal Paan Masala Was not going to work Plus the other competitors Like Kamla Pasan, Vimal, Shikhar All of them started selling Tobacco products to increase their profits Now with Tobacco People used to mix it with Paan Masala And the nicotine present in that Tobacco Which used to release Happy Hormone, Dopamine Which used to make them Addicted to Paan Masala Because of this, the companies
Which sold Tobacco with Paan Masala Their sales started increasing And seeing this, Paan Parag Started using this same strategy That’s why if you see today Vimal, Kamla Pasan, Shikhar, Baba Rajnigandha, there are many such brands Which sell Tobacco Now if you see here Then you will see 6 types of products And these are the products Which run this Tobacco Industry The first product is Khaini If you dry Tobacco in the sun And mix it with Chuna Then the second product is Gutka Which is a mixture of Crushed Arachanut, Tobacco, Katashu and Chuna And some aromas And the third product is Paan Masala This is also a type of Gutka But if you see generally There is no Tobacco in this But apart from this, all other ingredients are used And the fourth one is Zarda This is a raw Tobacco To make it smell good Many types of spices and additives are added And after all this The 5th and 6th products are Gudaku and Mawa These two things are a combination Of Tobacco and other things Now see why all these things are so dangerous Let’s understand this in a scientific way First let’s talk about Tobacco Chewing Tobacco Causes cancer of mouth, tongue, gums, stomach, gallbladder All these things Because There are more than 30 chemicals in Tobacco Which can alter The DNA structure of human cells Because of which These cells can multiply abnormally And take the form of a dangerous cancer Chewing regular Tobacco Increases your cholesterol and blood pressure Due to which Your chances of getting cancer increases by 60% But the most dangerous thing Is that chewing Tobacco Is 3 times more addictive than smoking.

Because the nicotine in the Tobacco Is much more than a cigarette It is so much That if you keep chewing a small Tobacco pouch For 30 minutes It becomes equal to 3 cigarettes Let’s understand this in detail Nicotine is a toxic substance Which goes into your bloodstream And activates adrenaline glands in your body Because of which Your body produces Adrenaline Hormone When Adrenaline Hormone releases We feel an instant energy It feels like There is more life in the body You want to get this feeling again and again
And because this feeling Has come from chewing Tobacco Now you have to chew Tobacco again All these Tobacco products Which you see in the market If you look closely You will see Arachanut Which is also called Supari Now many people may not know But this Supari Is also a carcinogenic addictive substance If you consume it without Tobacco You can get cancer From 2003 to 2011 FDA Food and Drug Administration Collected 1117 samples Out of which 98 samples contained Magnesium Carbonate For those who don’t know Magnesium Carbonate Is used in fire extinguishers And this thing Is used for human consumption It is very dangerous. But even after this, gutka companies use it because it is a kind of anti-caking agent which basically helps gutka to move other ingredients freely and this increases gutka’s shelf life. Magnesium Carbonate and Calcium Hydroxide which we also call Castic Chuna.
This is a kind of alkaline agent which increases gutka’s pH level which makes gutka a little bitter. What happens is when you eat gutka, the thin layer of skin inside your mouth burns it, so that the nicotine in tobacco can be easily absorbed in your blood stream. Now try to understand the upper layer of skin which is damaged by eating gutka our body tries to repair it.
But the regular gutka eaters keep eating gutka because of which the damage and repair cycle in the mouth But there comes a time when the body can’t bear it and that’s when this thing damages our DNA and turns into cancer. So far we have only talked about a few chemicals, but according to the Indian Journal of Cancer there are more than 4200 chemicals in smokeless tobacco.
But now the question is if this thing is so dangerous then why doesn’t our government ban it? Why are big companies promoting this thing on social media? Looking at the increasing consumption of tobacco, the Indian government passed the Cigarettes and Other Tobacco Products Act in 2003, in which all products related to tobacco were banned.
Under this act, tobacco production, supply and distribution were also regulated. In fact, in 2007, the Indian government launched an anti-cp program in which cigarettes and other tobacco products were completely banned on all advertisements. In fact, it was also brought that if someone does not follow the anti-cp program then he will have to pay a heavy fine and may even go to jail.
In our country, the cable television network rules which were implemented in 1994, any tobacco products, alcohol or any intoxicating products were banned on advertising of these products. Not only this, in 2011, the Food Safety and Standards Authority of India i.e. FSSAI banned all tobacco or any kind of nicotine products.
So in this way, all the tobacco products sold in India were banned on their promotion. Now, if anyone advertises these products, it was a punishable offense. But the question is, was there any benefit in doing all this? Because even today, if you look closely, all these products are being openly promoted. All the rules and regulations we talked about have failed badly in reducing tobacco consumption.
Now to understand why and how this happened, we will have to understand these two things in detail. 1. Loopholes National Law School of India University submitted a 50-page report to the Health Ministry in November 2020. All the loopholes mentioned in this report were present in the Cigarettes and Other Tobacco Products Act i.e.
COTPA in 2003. If you look closely at this report, the first big issue highlighted was that the COTPA legislation does not recognize the Framework Convention of Tobacco Control of the World Health Organization. Actually, to save the world from tobacco, in 2003, WHO launched the Convention for Tobacco Control.
And in this treaty, many evidence-based practices were mentioned, which can reduce the demand and supply of tobacco. Now, the report of the National Law School of India University was given to the Health Ministry. Along with raising many issues, 11 recommendations were also added. With the help of these recommendations, single-stick cigarettes, loose tobacco products, which are sold in small packs in the market, were banned.
Now, if we are talking about the loopholes made against these tobacco products, then the biggest loophole here is surrogate advertising. Because today, according to the rules, in India, you cannot advertise tobacco or nicotine products. But still, the company uses surrogate advertising techniques to promote its products.
Now, in this, the company makes 2-3 products, one of which is allowed and one of which is not allowed. And the product which is allowed, it follows all the government rules, which this company markets. But there is a catch in this. And the catch is that the product which is being marketed, its name is very similar to the other 2 non-allowed products.
Now, if we look at it technically, the company has marketed the product which is actually allowed. But somewhere, the products which are not allowed to be marketed, for example, look at this banner. In this, big celebrities like Amitabh Bachchan and Ranveer Singh are promoting the silver-coated cardamom of Kamla Pasand.
Now, according to the rules, doing this is not wrong. Because cardamom is a normal food item which is consumed everywhere in India. But, once you see Kamla Pasand’s cardamom pouch and Kamla Pasand Paan Masala together, you will see very little difference between the two. Similarly, if you see Vimal cardamom and Vimal Paan Masala promoted by Narendra Modi, you will see these two products are same.
Now, if you look here carefully, cardamom is being promoted, but the actual profit of the company is not from cardamom, but from selling tobacco products. Just look at this chart carefully. In this, the money coming to the company by selling Paan Paraag is 6.37 crores. But, how much money is the company spending on the advertisement of this product? 24.46 crores.
So, it’s a simple thing. The money being spent on the advertisement is actually coming in some other way. Now, these celebrities are not at all aware of this. Everyone knows that what is the real game behind all this. But still, in the greed of money, these people openly promote slow poison like tobacco.
The people who love them the most, their biggest fans, they sell poison to them. When the government imposed a ban on tobacco and nicotine products, these people created a loophole. All the Paan Masala companies realized that they cannot promote tobacco products openly. So, they started selling Paan Masala and tobacco in different pouches.
Earlier, tobacco was sold in one pouch along with Paan Masala. But, after 2011, companies could not do this. So, now we have seen that there has been no change in our country regarding tobacco. People were chewing tobacco earlier and today, they are chewing it even more. Because all these companies, without violating the rules of the government, with the help of surrogate advertising, have sold this poison to people.
In fact, by selling these tobacco in different pouches, companies have started marketing their Paan Masala as zero nicotine and zero tobacco. Because of this, their sales have increased. But, you will be very surprised to know that all these rules and regulations are just a show so that no one feels that nothing is changing.
Do you know why? The answer is Enforcement. In August 2019, Bihar’s state health department analyzed the samples of 12 Paan Masala brands and found that 7 out of 12 companies had nicotine in their Paan Masala which is completely illegal. Rajshree, Rajnigandha and Kamla Pasand were also included. In their packaging, it is written that their product is nicotine free.
And the biggest thing is that apart from nicotine, in these 12 samples, magnesium carbonate is also found which is used in fire extinguishers. It is a very sad thing, but our law enforcement authorities are able to sell their products by lying so easily due to their carelessness. Even the shopkeepers sell open mangoes, cigarettes, tobacco, but no action is taken against them.
Because there is so much corruption in our country that any shopkeeper has to give a week to the police and he can do all this work openly. Most people don’t even know but spitting in public places is a punishable offense in India. Smoking in public places is also prohibited. It is a punishable offense.
You can go to jail and have to pay a fine. But despite this, people do all this openly. In fact, they do it in front of the police. Moreover, when someone asks the tobacco smugglers why they are doing this, they proudly say that if tobacco smuggling is such a problem that people are getting cancer and public property is getting spoiled then why is the government not banning it? So see, there is a simple reason why the government is not banning this thing and that reason is economic benefits.
To understand this in detail, let’s understand its two parts. The first part is Tobacco Economics. Today, India is the world’s second largest tobacco producer and consumer. If we talk about 2020 alone, 7,61,335 tons of tobacco were produced in India. Now this tobacco is exported which benefits our foreign reserves.

According to Tobacco Institute of India, in 2023, 9,740 crores of tobacco has been exported. According to Central Tobacco Research Institute, today, in the tobacco industry, 3.6 crore people work in India out of which 60 lakh are farmers. and 2 crore farm workers who have helped in the production of tobacco and the remaining 1 crore people work in the processing, manufacturing and export of tobacco and after all this, when the final product of tobacco comes out, a lot of people work there as well If we talk about BD alone, 44 lakh workers get employment out of which most of the workers are female Apart from this, there are 22 lakh tribal workers who collect tendu leaves which is used to make BD Now obviously, all the people who work in the tobacco industry are the vote bank of all the governments This is the reason why even today a lot of politicians and industrialists are not allowing these tobacco products to be banned In 2020, when the government passed the Cigarettes and Other Tobacco Products Act its amendment bill an event was organized This event was organized by Swadeshi Jagran Manch and Bharatiya Mazdoor Sangh Do you know who was the sponsor of this event? All India BD Industry Federation Union Minister of State for Labour Rameshwar Teli Rajya Sabha MP Sushil Kumar Modi and Praful Patel All these people came here to strengthen the BD lobby They said that BD industry gives employment to a lot of people A member of AIBIF Arjun Khanna even said that BD should not be called a tobacco product because it provides employment to a lot of women through which they can send their children to school Bhartiya Mazdoor Sangh’s
B. Sundaran even says that till people don’t get an alternative to employment, no one should even touch BD industry So here people talked about supporting BD industry which is right from the point of view of employment but actually if we see this industry ruins a lot of people’s lives but here the second part behind this dangerous business is Paan Masala Mafia Today’s Paan Masala, Gutka, Khaini all these brands are running big business tycoons Rajnigandha, Tulsi and Baba are run by Noida based DS group whose revenue in 2023 was around 5500 crores Gulab, RMD and Kamla Pasan are run by Manikchand group and along with Parag Zarda, Paan Parag Parag Hazar and Parag Chutney all these brands are run by Paan Parag whose revenue in 2023 was 300 crores Today in all these business groups lakhs of people are working and all these companies work with politicians and help them in campaigns Minister of State for Finance Anurag Thakur told in February 2021 that out of 189 cases of tax evasion 25 cases are involving tobacco companies and 21 cases are registered against these Paan Masala companies
Many times enforcement direct raid rates have been imposed on these companies like in January 2022 GMG group got 410 crores in December 2021 Shikhar Paan Masala got 150 crores and in July 2021 Unidentified Masala Brand got 400 crores Similarly in December 2021 when Perfume maker Piyush Jain was arrested by ED he got 177 crores Piyush Jain used to provide edible essence to these Paan Masala companies so that you get the aroma of these Paan Masala .