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Crane Group reenters Andhra gutkha market

Chandrasekhar  |  Guntur 

Crane Group, the leader of the betel nut pieces market in Andhra Pradesh, has reentered the gutkha (a chewing tobacco containing areca nut) market.
Crane Group was the only Andhra firm manufacturing gutkha, before the state government banned gutkha in 2002. The Supreme Court struck off the ban order in August this year.
Speaking to Business Standard, the group's gutkha unit managing director said that the firm had occupied the second place in the Andhra gutkha market before the state government imposed the ban.
He said that the government, following in the footsteps of Tamil Nadu and Maharashtra, banned gutkha manufacturing in the state. The ban completely destroyed Crane's gutkha market, with the firm's loss amounting to crores of rupees. It stopped production, retrenched 1,700 workers and readjusted budget emergencies to clear bank loans.
"Now we have to start everything anew "" from organisation to production and marketing. It will take us some time to sharpen our strategies and recapture the lost gutkha market," Rao said.
The group's annual turnover for 2003-04 was Rs 75 crore, which includes Rs 50 crore sales of flagship product Crane betel nut pieces. The other products are Crane sweet supari, pan masala, premium betel nut pieces and soap.
He said that the then government did not consult the gutkha industry before imposing the ban and said that the measure put Crane out of business.
Therefore, over a hundred from north Indian states made a big fortune during the ban period. They dumped cheap quality and highly dangerous gutkha packets "" priced at exorbitant rates and worth thousands of crores "" in the Andhra markets during the last three years. The robbed consumers were the ultimate losers.
Although cases of illegal sale of gutkha had piled up in the state, the exercise failed to achieve results. The market size bounced up phenomenally. The ban utterly flopped, he said.
"Gutkha, with a market size of over Rs 5,000 crore, is an important link in the chain of tobacco and tobacco products. If gutkha is cut off from the chain, along with the tobacco sector, other related industries also suffer heavily. Gujarat produces chewing tobacco on a massive scale, a large portion of which goes into gutkha making. Ninety per cent of nuts produced in leader states like Assam and Karnataka end up as gutkha constituents. use 30-40 per cent of sandal and rose oils and other aromatic oils produced at Kanoj. In addition, 50 per cent of paper industry production is meant for gutkha firms," he said.
"Moreover, the gutkha industry pays around Rs 1,000-1,500 crore by way of sales and excise taxes, which is more than what cigarette industry pays," Rao added.
The government, instead of a ban on one or two products, may take up and organise a campaign against the use and consumption of tobacco products, he said.
"It should involve all sections of the society. The expenses for the campaign may be collected from the sale of tobacco and tobacco products in the form of taxes," he added.

First Published: Thu, November 11 2004. 00:00 IST