"It is extortion. Pure extortion." Tito's Goa's owner on why he exited the business

David D Souza (left) and Ricardo D Souza, partners, Tito's Resorts & Hospitality Pvt. Ltd, Goa.

A Facebook post on June 28 had party animals stop dead on the dance floor. Ricardo Joseph D Souza, partner of the iconic Tito’s Goa announced the sale of their entire business in Goa. It was not a happy deal, but one marked by “sadness but with anger”. A distraught D Souza attributed the sale of the 50-year-old club to harassment by officials including the police, the excise, MLAs and others.

Tito’s story goes back to early 1970s when hippies from Western Europe and the Americas were arriving in Goa in search of spiritual salvation. Goa, then, was different. No motorbikes, cars and restaurants. It was in 1971 that Tito Henry De Souza, an ex-armyman and father of Ricardo and David, decided to rent an old Portuguese house in Baga beach and started a restaurant with four tables and 16 chairs. It soon became a hangout for hippies and expats. But tragedy struck - Tito died young. Ricardo was 15, David, 13. The two brothers dropped out of school and ran Tito’s: Ricardo as chef and David as waiter. It was an arduous journey, but with time - and popularity - the brand extended to Tito’s Courtyard and Mambo. Tito’s became so famous that the entire stretch leading off the main road down to Baga beach has taken on the eponymous label ‘Tito’s Lane’. A statue of Tito Henry De Souza still stands in the crowded Baga centre.

The sale of Tito’s Goa has raised several questions about the state’s business environment and the corruption that trickles down to the last authority.

Ricardo D Souza, partner, Tito’s Resorts & Hospitality Pvt. Ltd, spoke to moneycontrol.com about ‘harassment’, the sale of Tito’s Goa, future plans and his ideas about improving Ease of Business in the state.

Tito’s Goa turned 50 this year. What prompted the sale of this iconic brand?

You have heard the story of a straw breaking the camel’s back. That straw came in the form a deputy collector who was harassing and threatening my staff. He tried to browbeat the employees by saying that the police will be sent to arrest them. But he is only a cog in the wheel. Everyone is in cahoots - police, politicians, authorities. The sale is a culmination of all the harassment we have received over the last 40 years from the police, the excise, the MLA, from sarpanchs, panch members. Everyone harasses us. It really tired us out.

Has harassment escalated over years?

Not really. Harassment has been a constant factor. It was there when we started, it continues to date. Just gotten worse a little, that’s the only difference.

What exactly is this harassment?

Put simply, it is extortion. Pure extortion.

There’s confusion about the current ownership status of Tito’s Goa... have you exited totally?

We have several businesses. The clubbing segment falls under the purview of Tito’s Resorts & Hospitality Pvt. Ltd. We have exited 65% from this vertical though we still retain full control over Tito’s Spirits under which we make/sell alcohol. The new investors have taken over the management. With 35% in hand, David and I will serve as advisers/mentors to Tito’s new management structure.

Is the brand dead?

No. Not at all. Tito’s Goa brand will not only live, it will spread far and wide in its new avataar. The investors are toying with the idea of an initial public offering (IPO) next year, and with the money raised we will expand to other cities and countries.

Where will Tito’s Goa signage go up next?

Tito’s Goa already has franchisee in Pune and Delhi. After the IPO, we are targeting at least 40 franchises within India (Mumbai, Mohali, Chandigarh are already on the drawing board). Internationally, we’ll step first into Dubai, Toronto and Manchester. We are proactively looking at entry into Africa and Ukraine.

Ricardo D Souza, partner, Tito's Resorts & Hospitality Pvt. Ltd, said Tito's Goa may enter Africa and Ukraine.

What’s the status of Tito’s Spirits? Is it going under the hammer soon?

As we speak, Tito’s alcohol is available in 500 stores in Goa. We have started exporting to African countries looking for good alcohol at reasonable rates. The aim is to turn Tito’s Spirits into the next UB Group.

Are you selling the Spirits vertical?

Right now, we have total ownership of Tito’s Spirits but with the new investors coming onboard, I am keeping the ownerships rights open-ended. I am not averse to the idea of stake sale.

What are the future plans of the new investors?

The ultimate objective is to turn Tito’s Goa brand into a one-stop shop for everything related to tourism. It would be the best thing for any tourist coming to Goa.

If you were to set the agenda to improve Goa’s Ease of Doing Business index, what will your top priorities be?

• The need of the hour is to create a single-window clearance system that would thwart red-tapism, corruption and delays.
• We should follow the Swiss method of referendum by the people. People should have a say in what is happening in their village/panchayat. This is imperative so that officials and authorities cannot impose their ideas on people.
• Do not make bad rules: The worst rule in Goa is Coastal Regulation Zone Act (CRZ) under which 200 metres from the High Tide Line is earmarked as No Development Zone. This rule has been abused by people and it is turning good people into criminals
• Infrastructure: We require more/better infrastructure.
• Local government should have precedence over non-government organisations (NGOs) that are hampering development in the state.

What can I say to that? What we need to do is change the mindset of the political leaders. We need better leaders who help people and not harass them. I want to end corruption. I want to say unpalatable things to the powers-that-be. Now I can say so because I have exited the business and the authorities will have nothing to harass me about.

A bartender juggles bottles at Tito's Goa. Original owners Henry De Souza and Ricardo Joseph D Souza still own 35% in the hospitality business and 100% in the Tito's Spirits business. (Image via Tito's Goa's Facebook page)