Brewery chairmen loved to whinge at their annual general meetings. Mostly about the meddling government and excessive taxation. Georges’ chairman makes some rather more telling points. Though obviously he moans about government policy and tax.
“You will have noted that your board, after careful consideration faced with decrease the net profit of £57,168, being £211,034 as compared with £268,202, decided to recommend the appropriation of £16,560 to contingencies reserve, and £8,000. as for many years past, to the pensions and benevolent fund, leaving the carry-forward £165,213, about £500 less, compared with September 30, 1948
Decrease in Dividend
We also recommend a final dividend on the ordinary stock of 13 per cent., making with the interim dividend of per cent., 18 per cent free of tax, for the year, being 4 per cent. net lower than year ago.
Your directors much regret having to recommend a lower rate of dividend. Possibly you will have noted that we are now back to the normal rate of dividend paid in pre-war years.
Stockholders who heard my remarks at the annual meeting last year, may remember that I said then that, especially since October 1948, there had been decreases in output every month, especially in our sales of draught beers. We hoped, that there might be some improvement last summer, and this was so to certain extent, owing to a fine summer, but gains in the bottled beers were more than counterbalanced by losses in the draught sales. There has been a steady swing back to bottled beers.
The quality of the company's beers have been well maintained in spite of all difficulties. The early years of the war, though full of anxiety and sorrow for the nation, were, from the money earning and money spending point of view, prosperous years, and this was reflected in this company's sales.”
Western Daily Press - Friday 27 January 1950, page 4.
I get three main points from that. First that the war years had been surprisingly good for brewers. Lots of demand and customers with cash in their pockets meant breweries earned good profits.
Something similar had occurred during WW I. At the start of that war many breweries had been teetering on bankruptcy. The war was the saving of them, returning them to profitability and raise their capital back up to pre-1910 levels. (Many breweries had to mark down their capital after the 1909 budget that greatly increased the financial burden on pubs, hence reducing their value. As pubs formed the overwhelming majority of a brewery’s assets, most ended up with share capital far greater in excess of the true value of the company.)
The second point is about falling sales. Beer production peaked in 1946 at 32.65 million barrels, then went into decline. It didn’t start rising again until 1960 and only exceeded the 1946 figure in 1970. You can see why there were so many brewery takeovers and closures between 1950 and 1970. There was considerable overcapacity in the industry.
Here are some numbers to demonstrate the trends:
|Production, tax and average OG 1945 - 1959|
|Year||Production (bulk barrels)||Production (standard barrels)||Duty per standard barrel||Average OG||Net excise receipts (pounds)|
|Brewers' Almanack 1955, p. 50|
|Brewers' Almanack 1962, p. 48|
The final point is the surge in popularity of bottled beer. Even in a declining market it was showing an absolute increase in sales. The usual explanations for this are on the one hand unfulfilled demand for many years due to government restrictions and shortages of things like bottles. On the other, lots of dodgy draught beer due to very low gravities, a shortage of good quality raw materials and poorly trained landlords.
It could also have been fashion. Some of the most popular styles of the 1950’s – Brown Ale, Milk Stout and Light Ale – were exclusively bottled products. If you wanted to drink them, you had no option but to buy bottles.
There will be more to follow about Georges.