Saturday, 12 March 2011

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.


Gary Gillman said...

That's an interesting photo. I don't think I have ever seen a photo of a bottle of pale ale in India. There appear to be two filled glasses behind the bottle. The colour of the beer is quite dark, which reminds one that the debate about how pale bitter beer was never seems quite over.

Although captioned "Soldier with Allsopp's", the label appears different from the ovel-shaped Allsopp label in this period collection (mid-1800's) U.K. and Canadian beer labels:

Of course, the label's design may have varied over time. I thought at first the soldier might be pictured with Abbott's beer, or Hodgson & Abbott's. The McCord collection in Montreal has an example of an Abbott's pale ale label (also one for Abbott's porter) which I posted a while back in a comment to one of Martyn's posts. It contains the Royal Coat of Arms. The bottle next to the soldier looks like there might be a crown in the centre but it is hard to say. (Those who wish to see the Abbott's pale ale label need only search the term "Abbott's pale ale" on the McCord website).

Note, in the link I give above, the three Bass pale ale labels. The first must be quite old because it uses a long s for one of the s's in the name Bass. The other two labels use the short s only, but clearly are updates of that label. Both labels must pre-date the famous Bass triangle label.


StuartP said...

From here it looks like a Simmonds label.

Ron Pattinson said...

That really is an Allsopp label on the bottle.

Gary Gillman said...

Here is another photo of an 1800's Allsopp's label with bottle. In this case, you can clearly see the famous red hand trademark. This is probably similar to the bottle pictured next to the sitting soldier and attendant, since a photo captioned "soldier with Allsopp's" presumably should be taken at its word.

The bottle in the attached has a neck label advising to let it stand before serving. The sitting soldier's bottle appears not to have a neck label, and is probably a couple of decades or so older.

The Allsopp label in the McCord Museum's collection must pre-date the development of the red hand trademark, which is suggested too by the absence of the triangle on the Bass labels in the same group.


Martyn Cornell said...

Judging by the magnificent set of Dundrearies sported by that sergeant, the picture was taken about 1858-1860.

Thomas Barnes said...

I'm with Martyn. The face fur, and possibly the uniform, point to a date ca. 1855-1865. Perhaps the obedient servant in the background is a reminder that all is well in India after the Sepoy Mutiny just a few years before.

My ignorant guess is that the label features Alsopp's red hand. It's not quite the right shape to be a Burton diamond or a coat of arms.

Barbarrick said...

Gary, I find it very interesting that the early Bass labels you link to all clearly state "London" rather than "Burton". Even later when Bass had many established agencies and the bottler's name was stamped on, a locally applied label would always say "Bass & Co Burton". I assume the London agent handling the shipping (and probably the bottling) of Bass at that time produced their own labels. Any thoughts?

Gary Gillman said...

Good spot on the London reference, I hadn't noticed it. I think the most logical explanation is that the London bottler was authorized in this case to place its city of origin and not that of Burton. This was probably because the term London had particular resonance in distant export markets, more than "Burton" would.

The Allsopp's label also does not state Burton.

Another possibility is, the Bass labels were counterfeit. However, I incline to the other explanation.

By the way, searching "Abbott's Pale Ale" on the McCord site won't pull up the Abbott's labels I mentioned, but if you search just "porter", it will.


Thomas Barnes said...

@ Gary. I'm with Barbarrick. My guess is that Burton ale would have been transshipped to London for bottling before being shipped abroad.

I believe that mid-19th century brewers really didn't have the technology to bottle beer at the brewery. IIRC, bottling lines date to the late 19th century.

Anyhow, it's still not uncommon for the location of the brewery's home office to appear on the label, rather than the location where the beer was actually brewed.