What happens when you sabotage your brand for unnecessary change? Ask Bira 91’s Ankur Jain
Mumbai: Ankur Jain had everything on his side- a product with a steady demand, a growing company, the support of leading investors and a bright outlook for the future. By 2023, his company, Bira 91, was celebrated for its innovative beer, and his success was highlighted widely across the media.
Then came an avoidable, rather stupid, mistake
Ankur was aiming to take his eight year old company public, and for that, he decided to change the company’s registered name from B9 Beverages Private Limited to B9 Beverages Limited, in order to comply with procedural norms for its planned listing.
Though there was nothing wrong with this, companies around the world change their names to keep up with times- but this case was different. There was a name mismatch in many places, even before the company decided to update the name, creating a perfect regulatory storm for the company.
The fact that alcohol is a state subject- and that the taxes and regulations differ widely- doesn’t help.
The downfall
The brand was already one of the best in its class, pioneering a new wave of craft beer brands in the country. The company was valued at $450 million before this saga unfolded, and was selling almost 9 million cases by early 2023.
Due to the name change issue, and the resultant idle inventories across the country, the cases sold reduced to 6-7 million cases by 2024, with a Rs.748 crore loss on revenues of Rs.638 crores.
The consequences
Due to this, the company has defaulted on its salaries and TDS obligations, with the last PF contribution made in June 2024. The company is due to pay salaries to the tune of Rs.50 crores, including almost 500 employees who have left the company since. The current workforce is just about 260 employees from 700 earlier.
Leading Chennai-based investor D. Muthukrishnan, who followed the developments at the company rather closely, tweeted:
“Bira 91 was one of the successful start-up stories of last decade. It is a popular craft beer brand. They were growing so well. Reality is strange than what you can imagine. A procedural goof up has lead to whole company being collapsing and the founder now being forced even to exit by company employees.”
He also said that though this was rather unfair on the company and its promoter Ankur Jain, the crisis would’ve been averted if he had consulted a professional.
“I remember once someone asked Hina Nagarajan, former CEO of Diageo India as to why she is retaining the name United Spirits instead of changing it to Diageo India limited. She said that the company checked with best legal brains in the country and name change would lead to huge disruptions for business,” he explains with an example.
“Though what happened to Bira is extremely unfair, you’ve to accept the reality of India. Procedures, compliance and proper documentation are extremely important. The rules are so complex you should never desist from taking expert advice. What you assume need not work in reality and may even go against you”
Even though PM Modi is encouraging entrepreneurs to Make in India for a Viksit Bharat, such unnecessary challenges have tested the limits of entrepreneurs’ patience. There may be many such cases which aren’t widely reported, but the reality is that red tapism and corruption has been the biggest barrier to a Viksit Bharat, and reforms are urgently needed to boost India’s image as an investment-friendly destination.
<p>The post What happens when you sabotage your brand for unnecessary change? Ask Bira 91’s Ankur Jain first appeared on Hello Entrepreneurs.</p>
