Saturday, 21 April 2012

Allsopp & Sons' Prosperity

Shockaroonee time. Something that isn't about Scotland. I'm briefly returning to my Allsopp obsession. (I dream of meeting Kirsty. And yes, she is a relation.) It's another cautionary tale, spiced with a sprinkling of xenophobia.

What's the moral? See if you can work it out

"Allsopp & Sons' Prosperity. A considerable amount of investment-buying has recently been going on in the shares of Allsopp & Sons, Ltd. The very large number of high-class tied houses new agencies secured and opened by the Company at home and abroad during the past three years have caused a great increase in the volume of trade done, and consequently added materially to the profits earned. The increase in the business in all departments is steady, and during the past few months particularly has been remarkable. A new wine and spirit section started by the firm is now in operation, and will henceforth largely swell the annual profits. The new lager beer brewery is almost completed, and in a few weeks "Allsopp's Lager" will be on the market. This last more on the part of the firm deserves the support of the public, inasmuch as the lager beer trade in the United Kingdom has up to now been monopolised by foreigners. Allsopps' enterprise in this matter, besides improving their own prospects, will strike a blow at this outside competition in a branch of industry particularly our own, and gives employment to a large number of our own people."
Dundee Courier - Saturday 24 June 1899, page 3.

The moral? Don't believe everything you read in newspapers. Especially not in the financial section.

From the article, you could easily believe Allsopp was a flourishing concern, whose canny pub acquisitions were a sure guarantee of future profits and whose Lager would drive out Johnny Foreigner. Plus they'd expanded into the wine and spirit trade. What could possibly go wrong?

Ironically, the gushingly optimistic piece about Allsopp came directly under an article about the aftermath of the Pattison's bankruptcy:

"Pattisons' Whisky Stocks.- A Leith correspondent telegraphs : — A syndicate, consisting of some of the principal whisky merchants and distillers throughout Scotland, is in process of formation with the view of buying up the large stock of whiskies, &c, held by Pattisons, Limited. This stock is at present estimated at from £150,000 to £200,000, though a fair proportion of this consists of wines and brandies. The deal has not yet been completed, but it may be taken that the stocks will not be allowed to come on the market. A number of well known names in the whisky trade are mentioned in Leith as being interested in the syndicate, the prime movers being the firms who were so badly bitten by the Pattison collapse. The whiskies will be purchased at about 100 per cent, under prices at which they were valued by the Messrs Pattison."
Dundee Courier - Saturday 24 June 1899, page 3.

Allsopp's were as overambitious as Pattison's. And almost shared their fate.

Those pubs, far from being a great investment, almost bankrupt them. Late starters in the tied house game, they paid over the odds. And suffered financially for it. In 1913, the receivers brought in John Calder to sort out the mess.*

Allsopp's Lager never achieved its anticipated success. The Lager brewery, having lain idle, was moved to Arrols' in Alloa in 1921. All Allsopp's Lager was from then on brewed in Alloa.*

Was entering wine and spirit trade, just when there was a whisky crisis and bankrupt stock was being dumped on the market, such a clever move?

With hindsight, it's easy to see how unfounded the article's optimism was. That's one of the reasons I love old newspapers: gives me plenty of opportunities to be smug.

* "Alloa Ale", by Charles McMaster, 1985, page 16.

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