True confessions of a liquor syndicate member

I hold stake in four liquor outlets. Liquor traders come together in syndicates with three objectives: raise investments, spread risk and maximise profit. A syndicate can raise more capital, bag more vends and control the trade to maximise profits. The last objective is often met by selling above maximum retail price.Liquor syndicates have been in operation for years, but their number increased in June 2010 when investors came into the trade from other fields, lured by the profits. Many solitary vendors had no choice but to join a syndicate. My syndicate is a group of 12 members who own stake in 15 shops in Karimnagar district. Most members invest in benami names. just before the June 2010 bidding for licences, our syndicate realised that we did not have enough money. We were then approached by an aide of a local politician who offered to invest Rs 4 crore in our syndicate.True Confessions of a Liquor Syndicate Member Over the next few days, we spent `1 crore to bribe officials and to persuade our competitors to withdraw. We offered them a handsome ‘compensation’. We had to bid high. We ended up paying about 30 per cent more than in the previous auction.Winning the bid was just the first victory. We had to make everybody happy.First, we hired a couple of trusted persons to keep dayto- day accounts and deliver fixed amounts to specific persons as per our instructions.The amounts are fixed for every politician, official and others depending on their designation, place (state-level, district/mandal headquarters, villages). It also depends on the turnover of our shops.Mamools are paid to excise officials to ignore sale of booze above MRP, loose sale of liquor and not keeping to licensing conditions. Similarly, bribes are sent to the police for not booking cases against us if we fail to keep to legal open and close timings.We also pay journalists in the print and electronic media to not write anything about our rule violations.The mamools range from `2,000 to `2 lakh. The money is delivered by our employees or a junior officer collects it from us and passes it on to the higher-ups.Syndicate members meet regularly at our office where the accountants present us the profit and loss statements.At the end of every month, the overall profit and loss statements are prepared after sending the hafta money to politicians and officials.We submit the necessary documents to the government at the end of every four months.Because we bid high and have to give bribes at every level, we can earn a profit on our investment only if we sell liquor above the MRP. Turnover from the first six months covers only the original investment, the bribes, the cost of stock and salaries etc. It is only in the second half of the year that we start to make a profit. The profits range from `60 lakh to `1 crore.If the government want vendors to sell for MRP, there will be no bidders for the next auction in June this year.