The Philippine STAR 02/14/2005

Whether in politics, business or even a religious institution like the Catholic Church with the frail Pope John Paul II, the question of who will be the next leader is of paramount concern to all. Perhaps more difficult than establishing a business or organization from scratch is the arduous challenge of preparing for one’s own exit. How do leaders objectively, humbly and smoothly prepare succession? When shall we realize that nobody is indispensable, that a test of leadership is whether the institution can still flourish and continuously renew itself when we are already long gone or kicked upstairs?

Elizaldes Sell To Lucio Tan, Ayalas To Palanca To SMC

In the topsy-turvy world of Philippine business, the merry-go-round of ascendant fortunes and reversal of fortunes is almost breathtaking in their fascinating twists and turns. For instance, the changing ownership of Tanduay Distillery reflects the dynamic flux of fading old-rich money versus the vigorous energy and ambitions of brash, self-made fortune. Established in 1854, Tanduay Distillery was once under the control of the once pre-eminent Elizalde family whose partners were fellow Basques, the Ynchaustis.

Two years after the Edsa I uprising and with a new government considered politically antagonistic to him, immigrant "rags-to-riches" billionaire Lucio Tan still in 1988 bought Tanduay and infused investments to expand it 50 times bigger. It now has distilleries in Manila, Laguna and Bacolod, with a major new facility scheduled for operations next year in Cagay! an de Oro City, Mindanao. It is ironic that although Lucio Tan does not drink liquor, his Tanduay brand reputedly controls 98 percent of the domestic rhum market and is even exported.

The saga of another top liquor brand again illustrates the ups and downs of business families, whose heirs had either lost interest in business, had become too comfortable and laid-back, or had simply wanted to cash in on their forebears’ legacy. Penniless Chinese immigrant Carlos Palanca Tan Guin Lay founded a small distillery in Tondo, Manila called "La Tondeña Incorporada" and building it up as No. 1 in the Philippines. By 1924, the Chinese Chamber of Commerce President Carlos Palanca purchased the landed Hispanic Roxas-Ayala-Zobel’s main distillery business lock, stock and barrel – including their headquarters in Calle Echague (now Palanca Street), Quiapo, Manila and the prized Ginebra San Miguel brand.

Six decades later in 1987, Palanca’s mestizo heirs ceded control of their family ! jewel to San Miguel Corporation (SMC) in a "joint venture". A few years ago, Eduardo "Danding" Cojuangco Jr. formalized the demise of this Palanca firm and buried it by renaming this La Tondeña subsidiary as Ginebra San Miguel. Today, Ginebra San Miguel is the country’s No. 1 gin and the world’s third biggest distilled spirit. The only consolation to this business tragedy was that the Palanca heirs had used some of their inheritance to honor the memory of their immigrant founder with the country’s most prestigious annual Don Carlos Palanca Memorial Awards for Literature.