The rise and fall of Hodgson

A cautionary tale about the danger of arrogance in business. And of pissing off too many people.

My apologies for these being second-hand quotes, but I can't lay my hands on the original publications.

What other difficulties were to be surmounted can be judged from the accompanying extract from a "Circular on the Beer Trade of India," published in 1829, by the Messrs. Tulloch and Co., of Calcutta :—

"Beer has for many years been an article of extensive consumption in Bengal; and it is highly probable that an increase would take place, were it not for the very high price to which it frequently rises. The great fluctuation in the price of this article has been caused entirely by the irregularity of the supply, and the plans laid down by Hodgson and some of his monied neighbours to keep all others out of the market.

So entirely dependent were the public upon this brewer, that he in a great degree regulated the price and the quantity imported. Others who attempted to introduce the beer into the market were compelled to withdraw, having lost very considerably by all their speculations; for Hodgson, when he knew that other brewers were shipping, sent out large quantities, and thereby reduced prices to such low rates as to frighten his rivals from making second shipments. Having effected this, the following years he had the market to himself, and prices rose occasionally under the short supply to 180 rupees and even 200 rupees a hogshead. He thereby made up for the sacrifice of the previous year, and effectually deterred others from prosecuting their speculations in this market. Another thing in his favour, and which operated for a long time, was the high repute in which his name stood for beer; so much so, that no other of a good quality was bought by the retailers, as they could not dispose of it."

"Burton and its bitter beer" by John Stevenson Bushnan, 1853, pages 102 - 103.

Businessmen, eh? What a ruthless bunch of bastards. Forcing competitors out of the market by providing beer at give-away prices, then whacking up the price as soon as they've left. It's a tactic that many of the world's large brewing dcombines have pursued at various times. One thing that will never go out of fashion

The "Remarks on the Beer Trade of India," published at Calcutta, furnish us, incidentally, with some particulars of the circmstances of the Beer Trade at this period, that materially operated in Mr. Allsopp's favour at this date, 1824 :—

" The commanders and officers of the Indiamen were, up till 1824, Hodgson's best customers; his Beer formed one of the principal articles in their Investments, and it was customary for him to give them credit for twelve or eighteen months, if not for the whole amount of their purchase, for at least one half of it. But about this time" (triumphant, we may suppose, at his imagined victory over Mr. Allsopp) "he not only raised his price from £20 to £24, but refused to sell on any terms except for cash, even to parties of unquestionable credit. This naturally drove many of his best customers to other brewers; but Hodgson & Co., confident of the power they had over the market, sent the Beer out for sale on their own account; thus they, in a short time, became Brewers, Shippers, Merchants, and even retailers. These proceedings naturally and justly excited hostile feelings in those engaged in the Indian Trade at home; while the public here, seeing at last the complete control which Hodgson endeavoured to maintain over the market, turned their faces against him, and gave encouragement to other Brewers who fortunately sent out excellent Beer."

"Burton and its bitter beer" by John Stevenson Bushnan, 1853, pages 105 - 106.

Apologies if you've heard all this before. This is a much-quoted text. I'm including it for completemness. But it does provide a valuable insight into the workings of the Indian beer market. Annoying those who ship and resell your beer wasn't the brightest move of Hodgson's part. Taking over the whole of the supply chain, from brewing to retailing, doesn't seem too clever, either, given the large extra risks being taken on.

The firm of Hodgson (later Hodgson and Abbott) continued in the India trade for several more decades. (The advert to the left is from 1843) Though after 1830 they were eclipsed by Allsopp and Bass both in terms of volume of beer sold and renown amongst customers.

This rise in Bass and Allsopp is made clear by the premium price their Pale Ale fetched. Poor old Hodgson's beer fell in value. As this shows:

"Calcutta (April 20). Beer—The only transaction reported is that of Rees's, at Co.'s Rs.48 per hhd. Market unfavourable, prices inclining downward. Allsopp's at Co.'s Rs.628 65 ; Bass's the same ; Hodgson's 45.
"The Indian mail, vol 1, 1843-1844", 1844, page 444."

Hodgson's beer sold for almost 50% less than his Burton rivals. The 45 rupees a hogshead is mall beer compared to the 180 to 200 rupees a hogshead of the time of Hodgson's virtual monopoly.

Through the middle decades of the 19th century Bass and Allsopp slugged it onto, toe to toe, for supremacy in the Indian market. That neither was ever a clear victor, was probably better for drinkers. Who never had to endure a monopoly of beer supply, and the accompanying artifically inflated beer prices, again.