Edinburgh United Breweries is launched

It seems like ages since I last reproduced a company prospectus. As I realise how much you all love them, here's another.

This is a rather special one. For several reasons. Firstly, it's one of the earliest large mergers in British brewing. It marks the beginning of a new phase in the industry. An age of brewery combines operating from multiple plants. By combining forces, the four breweries involved immediately promoted themselves to being one of Scotland's largest beer producers. It's this process of mergers and takeovers that eventually led to the formation of the Big Six in the 1960's.

What's significant is that this predates by almost a decade the first big London merger, that of Watney Combe and Reid to form, er, Watney, Combe, Reid. Already substantial breweries in their own right, after the merger they became the third-largest in the country, trailing behind only Guinness and Bass.

Right. On the with the dull bit. See if you can spot the unusual way the assets were purchased by the new company. It's important for what happened later.

"The LIST of APPLICATIONS will OPEN on THURSDAY, the 19th Day of December, 1889, and will CLOSE on or before SATURDAY, the 21st Day of December, 1889,
THE EDINBURGH UNITED BREWERIES, LIMITED.

SHARE CAPITAL, £450,000. Divided into—
12,500 Six Per Cent. Cumulative Preference Shares of £10 Each,     £125,000
12,500 Ordinary Shares of £10 Each, . . ..             125,000
                                £250,000
Five Per Cent. First Mortgage Debentures, £200,000.
Present Issue— £110,000 in Preference Shares, £110,000 in Ordinary Shares, and £200,000 in Debentures.

The Shares are Payable as follows, viz. :— 10s per Share on Application, £4 10s per Share on Allotment, and the balance by two instalments of £2 10s each per Share at two and four months thereafter.

The first Mortgage Debentures, which will be issued in multiples of £10, are payable— 5 per cent, on application, and 95 per cent, on allotment.

TRUSTEES FOB THE DEBENTURES.
The Commercial Union Brewery Investment Corporation, Limited.

DIRECTORS.
Sir W. Hamilton Dalrymple, Bart., of North Berwick,
C. Page Wood, Esq.
F. M. Haig, Esq., Director of Parker's Burslem Brewery, limited.
Percy Reid, Esq., of Messrs Prior & Reid, Brewers, Hatfield.
*Duncan Stewart. Esq., Edinburgh and Leith Brewing Company.
*Archibald Smith. Esq., Summerhall Brewery, Edinburgh.

MANAGING DIRECTOR.
*Mr William Stewart, late Managing Partner of Edinburgh and Leith Brewing Company.

*Will join the Board after Allotment.

BANKERS.
The Royal Bank, of Scotland, 123 Bishopsgate Street, London ; St Andrew's Square, Edinburgh : and Branches.

SOLICITORS.
Messrs Nicholson, Graham, A Graham, 21 Coleman Street, London. E.C. Messrs Whillip, Laing, A Co., 41 Charlotte Square, Edinburgh.

BROKERS.
Messrs Panmure Gordon. Hill, & Co., Hatton Court, Threadneedle Street, London, E.C.
Messrs John Robertson & Co., 31 George Street, Edinburgh.

AUDITORS.
Messrs J. R. Ellerman & Co., 12 Moorgate Street, London, E.C.
Messrs F. J. Moncreiff & Horsbrugh, 40 Castle Street, Edinburgh.

SECRETARY (pro tem.)
Mr F. G. Burt.

Temporary London Offices— 12 Moorgate Street, London, E.C.
Registered Offices— Bells Brewery, Edinburgh.

ABRIDGED PROSPECTUS.
This Company has been formed to acquire, amalgamate, and carry on four well-known and old-established Breweries in Edinburgh, viz :— (1) The Edinburgh and Leith Brewery (Robert Disher A Co.) ; (2) Ritchie A Sons' Bells Brewery ; (2) Robin, McMillan, & Co.,Summerhall Brewery ; and (4) D. Nicholson's Palace Brewery and Wholesale Wine and Spirit Business. By amalgamation material economies in the expenses should be effected, both of production and distribution. The businesses are all old-established, and have been successfully carried on up to the present time.

EDINBURGH AND LEITH BREWING COMPANY.
This Business, better known out of Scotland as Robert Disher A Co., has been carried on by a large private Copartnery since 1821. The Business even then was old established. Its products enjoy an almost world-wide reputation, "Disher's Ten Guinea Ale" being among them. The trade mark is well known throughout the country. The Company acquire the valuable feuhold Brewery covering two acres of ground, consisting of Brewhouse, Tun, and Square, Rooms, Coolers, Cellars, Cooper-house, Yards, Stables. Maltings, &c, Horses, Drays, Carts, subject to a nominal rent practically equal to freehold.

Attached to this Business are Agencies in London, Glasgow, Newcastle, and many other important towns.

In addition to the well-established home trade a large Business is done in England, where Disher's Ales are well known. Included in the purchase are certain dwelling-houses, &c, and there is room for extension if necessary.

G. RITCHIE AND SONS' BELLS BREWERY.
This Business is very old established, having existed prior to 1755. Its Beers enjoy the best reputation. A large trade is done with the North of England, Agencies being numerous and well established, the principal in England and Ireland being at Newcastle, Sunderland, Manchester, Hull, Cardiff, Dublin, and Belfast.

The Brewery, which is feuhold at a nominal rent, practically equal to freehold, covers two-and-a-half acres of ground, and consists of Brewhouse fitted with 50-qr. plant maltkilns, with a capacity of over 19,000 qrs., Office, Cooperage Stores, and Stables. There is an excellent supply of good water for brewing purposes from a well on the premises.

Included in the purchase of this Brewery are loans to publicans, andseven Publichouses or Beerhouses, Cottages, Horses, Drays, Carts, &c.

ROBIN, McMILLAN, A CO.'S SUMMERHALL BREWERY.
This Business has been established over 150 years. The Brewery, which is feuhold at a nominal rent practically equal to freehold, covers about two acres of ground, and consists of Brewhouse Maltings with a capacity of 9000 quarters — 40-qr. plant, and the usual appliances. There is an excellent supply of water from a well on the premises. This Brewery also does a considerable trade in England, and has many well-established Agencies, besides its home trade. Included in the purchase are Horses, Drays, Carts, Ac.

D. NICOLSON's PALACE BREWERY.
This Business is also old established, and its Beer enjoys a good reputation. The capacity of the Brewery is, however, much larger than the present output. The tenure is feuhold at a nominal rent, practically equal to freehold. It has a 40-qr. plant, with the usual appliances, horses, carts, &c, with Maltings at the Brewery and at Jane Terrace, equal to 10,000 qrs. There are many well established Agencies and a small export trade attached to the Brewery, and carried on in conjunction therewith is a Wholesale Wine and Spirit Business, and the extension of this to the customers of the other Breweries should yield large additional profits.

The books of the Edinburgh and Leith Brewing Company for the year, ending 31st August, 1889 ; and also of G. Ritchie & Son, Bells Brewery, and of D. Nicolson & Son, Palace Brewery, and Wine and Spirit Business, for the year, ending 31st December, 1888, have been examined by Messrs F. J. Moncreiff & Horsbrugh, of Edinburgh, and Messrs J. R. Ellerman & Co., of London, whose reports state that the net profits, after making provision for bad debts, depreciation, &c, amounted to £22,528. They have also examined the books of Messrs Robin, McMillan, & Co. for the three years ending 30th September last, and certify the average annual profits at £5939, after making provision for bad debts, depreciation, &c.

Thus the total profits of the four Businesses amounts to £28,467 per annum. The trade of G. Ritchie A Sons is increasing very rapidly, the sales for the year ending 31st December, 1888, being 33.000 barrels, while this year, up to the 30th November last, they have been at the rate of 39,000 barrels per annum, which will undoubtedly increase this year's profit.

The sales of the Edinburgh and Leith Brewing Company (Disher's Ale) have also been rapidly increasing, but the balance-sheet is taken to a more recent date. Still, the sales for September, October, and November last exceeded those of the corresponding months of last year by 1517 Barrels, or at the rate to over 6000 Barrels per annum.

The two other Businesses are also doing a good and increasing trade, and the total Barrelage of the Combined Businesses for the year ending 30th November, 1889, was 110,000 Barrels, showing a considerable increase upon the previous year.

The Amalgamation of the four Businesses under one management must not only tend to increase the sales and effect economies both in cost of production and distribution, but should lessen the competition the existing firms individually are subject to, and convert them into one large concern, whose trade marks should enjoy great publicity.

To pay 5 per cent, on £200,000 Debentures requires         £10,000
To pay 6 per cent, on £110,000 Preference shares requires     6,600
                                £16,000

Thus if the profits only amount to £25,467, as shown by Messrs F. J. Moncreiff & Horsbrugh and Messrs J. R. Ellerman & Co.'s reports, there would remain, after paying the above £16,600, a sum exceeding 10 per cent, on the Ordinary Shave Capital, apart from the increase in the respective businesses above indicated, and the extra profit anticipated from the amalgamation, which will accrue entirely to the Ordinary Shares.

The properties have been acquired by Mr W. H. Dunn, the vendor to the Company, upon the terms of the contracts presently described, and he has fixed the price to be paid by the Company for the whole of the properties, breweries, maltkilns, loans to publicans, wine and spirit stores, plant, goodwill, horses, &c, at £320.000. The Company will not take over any of the liabilities of the respective firms.

Under the above arrangement there will be a Working Capital of £100,000. The Company will also have £30,000 of Unissued Capital for extending the Business from time to time.

Application will be made for a quotation on the London, Edinburgh, and Dublin Stock Exchanges.

Special attention is drawn to the fact that there will be no Mortgages on any of the properties other than that for securing the First Mortgage Debentures.

The following contracts have been entered into : — A contract dated the 1st and 11th November, 1889, and made between Robert Robin, Archibald Smith, and William Greenlees of the one part, and W. H. Dunn of the other part ; a contract dated the 4th and 11th November, 1889, and made between James Alexander Molleson of the one part, and W. H. Dunn of the other part; a contract dated the 10th and 18th November, 1889, and made between George Ritchie of the one part, and W. H. Dunn of the other part ; a contract dated the 23d and 25th November, 1889, and made between Robert Robin, Archibald Smith, and William Greenlees of the one part, and W. H. Dunn of the other part; a contract dated the 26th November and 6th December, 1889, and made between the Edinburgh and Leith Brewing Company and the shareholders thereof of the one part, and W. H. Dunn of the other part ; a contract dated the 14th day of December, 1889, between W. H. Dunn of the one part, and the Company of the other part, for the sale by Mr Dunn to the Company of the said business, properties, and effects at a profit, Mr Dunn paying all expenses attending the incorporation and registration of the Company, and also all underwriting, brokerage, commissions, printing, advertisement, and expenses attending the formation of the Company up to and including allotment.

Other arrangements have been entered into with various persons, which may constitute contracts within the meaning of the 38th section of the Companies Act, 1867.

There are also various contracts connected with the Breweries, &c, as a going concern, which, from the nature of the business, it might be injudicious to publish.

Applicants for Shares must therefore be deemed to waive the insertion of dates and names of the parties to any such arrangements or contracts, and, in order to prevent any questions, must accept the above statement as a sufficient compliance with Section 38 of the Companies Act, 1867, and otherwise.

The Memorandum and Articles of Association of the Company, together with copies of the above-named Contracts and of the reports of Messrs F. J. Moncreiff A Horsbrugh and Messrs J. R. Ellerman & Co., can be inspected at the Offices of the Solicitors of the Company.

Prospectuses and Forms of Application can be obtained at the Offices of the Company or at the Offices of the Bankers, Brokers, and Solicitors."
Dundee Courier - Wednesday 18 December 1889, page 1.

See what was odd? The breweries weren't sold directly to the new company. They were purchased by Mr. W.H. Dunn who then sold them on to the company. I'm not sure I understand why the deal was done this way. What I do know, is that it led to a court case. A very long and drawn out one.

This is one of those prospecti with some useful details, not just about profits (we've learned just how unreliable those can be) but of output. 110,000 barrels a year (the combined output of all four breweries) was very substantial in Scottish terms. To contextualise that, the largest London brewer, Barclay Perkins, brewed just over 500,000 barrels in 1889*.

That Disher's Ten Guinea Ale is specifically mentioned shows gives an indication of its renown. It even survived the closure of the Edinburgh and Leith brewery.

On the face of it, this merger seemed a smart move. The company got a jump on its competitors both in terms of company organisation (this was one of the first Scottish brewery flotations) and in output. They should have gone on from strength to strength. But, just as so often, things weren't quite that simple.




* "The British Brewing Industry, 1830-1980" T. R. Gourvish & R.G. Wilson, pages 610-611