Charrington was the first London Ale brewer to break into the big time. As public taste moved from Porter to Mild Ale in the second half of the 19th century, they expanded rapidly. The purchase of Hoare cemented their position as one of London's leading brewers.
Now we've done the contextualising, here's the article:
"CHARRINGTON AND CO., LTD.It's no surprise that Hoare's Red Lion Brewery was closed straight away. Charrington had a modern brewery of their own not far away. Supplying Hoare's tied estate wouldn't be a problem.
Trade Conditions and the Beer Duty.
The ordinary general meeting of Charrington and Co.. Ltd. was held on the 10th inst., at the Anchor Brewery, Mile End, London, E.
Mr. Cecil E. W. Charrington, M.C. (the chairman of the company), presided.
I do not propose to go into the details of our deal with Messrs Hoare and Co., for the simple reason that it would take a very long time. The negotiations were very long and intricate, but I may say at once that the terms were accepted by both sides with a minimum of disagreement. As regards Messrs. Charrington and Co.'s Ordinary and Preference shareholders, although they did not all agree, not a single one objected; and in the case of Messrs. Hoare and Co. (there were only Ordinary shareholders there), less than half of 1 per cent, objected. Therefore, I think we can congratulate ourselves, in an amalgamation of this size, that the two bodies of shareholders came to such an amicable agreement.
The net result of this big "deal" has been a very large increase in the company's liabilities, but I trust it has also been a very valuable addition to our assets. I may say that the directors of Charrington and Co. did not enter lightly into these new commitments, nor did they very willingly put an end to what had been for 150 years an almost purely family business, but they considered that an amalgamation with a firm of the same size and standing as themselves would in the long run be in the best interests of the company.
The issue of the £4,500,000 Debenture stock at 98 we can consider, I think, on the whole, quite satisfactory. I am well aware that it we were going into the Money Market at the present moment we could get better terms, but we must not forgot that if we had wanted to raise this large sum of money only three or four years ago we should no doubt have had to do so on a 5.5 per cent, basis. I think we can congratulate ourselves that we were able to issue the debentures at 4 per cent. None of the prior charges bears a higher rate than 4 per cent.
Now, as regards the trading conditions of the year. You will have gathered from the printed report that the first four months of the year were extremely bad. The "Snowden" tax of 1931 had a very damaging influence on our trade when it started, but it had an increasingly severe effect as time went on. - The first four months of last year were quite the worst period for trailing that we have experienced since the war. Our barrelage dropped very considerably until about the end of April, 1933; the increase in the last eight months of the year did not quite make up the leeway lost in the first four months. Unfortunately, the present Chancellor of the Exchequer took eighteen months instead of only six to find out the great mistake his predecessor had made. When he did find it out, 1 think he met the situation fairly He said: "The public are to get their beer cheaper, but I am going to ask the brewers to do something for me" —and he asked us to increase our gravity by two degrees and to use more British malt. Well, that was an expensive matter to brewers, but it enabled us to inform the public that beer would be "cheaper and better" and good advertising can never be had for nothing.
The continuance of the policy has been strongly recommended by the Brewers' Society, and is being strictly adhered to by this company.
The "Snowden" tax, besides damaging the brewing trade and threatening the Exchequer with consistently diminishing returns on the beer duty, hit the retail trade with exceptional severity. While we have made considerable reductions in our rents of licensed property, I regard it as a very real grievance on the part of the licensed victualler that no reduction has beer made in the licence duties.
With regard to our beers, during the past 12 month they have been excellent. In taking over this large increase in trade we are installing the very best plan available, for I do not believe it is ever good policy to do anything which might interfere with the quality of the article produced. We have a very fine site, and one which has proved readily capable of expansion.
As regards our licensed property, we have spent last year about an average sum on repairs to houses and on rebuildings of old properties, and on the erection of modern public-houses. I hope they will be well patronised by our shareholders and the public at large.
It is really outside my scope, I think, to deal with the closing down of the Red Lion Brewery and the concentration of the work here at the Anchor Brewery but I feel sure you would like to know that we run already taken over the supply of a large number of the houses that were supplied by Messrs. Hoare and Co.
There is one more matter to which 1 ought to refer, and that is the matter of compensation for the staff of Messrs. Hoare's Brewery. It was part of the terms of our "deal" with Messrs. Hoare that a definite lump sum should be guaranteed by Charringtons for that purpose, and that sum was agreed at £25,000. I do not think that that will be an adequate amount, but that was the sum agreed on; if necessary we shall, course, add to it. But it is only right for me to tell you that during his lifetime Sir John Ellerman, without making a definite promise, said he would like out his own pocket to add to that fund. Unfortunately, he died very shortly after the "deal" was completed but his executors felt that they would be carrying out his wishes (and they were entitled to do so under the terms of his will) by dealing with the matter; they have most generously promised to grant the sum of £20,000 towards that fund."
Brewers' Journal 1934, page 280.
Wondering what the "Snowden tax" was? A salutary lesson for greedy governments, that's what it was. In 1931 Philip Snowden, Labour Chancellor of the Exchequer, raised beer duty from 84 shillings a standard barrel to 114 shillings. What happened next? Brewers cut gravities so the retail price could remain the same and the revenue raised actually fell. The tax collected didn't return to its 1930 level until 1940.
|Tax and beer output 1930 - 1938|
|Year||Bulk Barrels||Std. Barrels||Tax/Std. Brl||Av. sg||Total Tax £|
|1955 Brewers' Almanack, page 50.|
Eventually the tax was dropped back to 80 shillings when the brewers agreed to raise gravities.
Given the slump that it caused in beer production, the tax rise and Hoare's decision to sell may well have been connected.
* “The Brewing Industry in England 1700-1830”, Peter Mathias, 1959, p 551-552