Greene King – rising costs and penal taxation

I realise that I could be talking about current news with that title. But you know me, I rarely venture beyond the safety of the 1950’s. Which is where we’ll be today.

Looking at Greene King’s annual report for 1952. As is traditional, it kicks off with the chairman moaning about the level of taxation:

“‘RISING COSTS, PENAL TAXATION’ GROAN
BURY BREWERY HAD TO SELL SOME OF ITS INVESTMENTS
But shareholders get 21.25 per cent, divi

The hope that the Government may see its way to reduce the duty and taxation generally, to enable the Brewery to charge a more reasonable price for its products was expressed by the chairman (Captain Sir Edward Greene, Bart., M.C.) when the 65th annual meeting of the shareholders of Messrs. Greene King & Son, Ltd., was held at the Westgate Brewery on Wednesday.

We sincerely hope our expenses will not increase still further, and that the Government may see its way to reduce beer duty and taxation generally, sufficiently to enable us to charge more reasonable price to the public for our products." he said.” 
Bury Free Press - Friday 22 August 1952, page 1.

Brewers are still waiting for the government to substantially reduce beer duty. I think it’s fair to say that it’s probably never going to happen. The high price of beer was seen by the industry as the main cause of falling beer sales. I’m not sure it was quite that simple.

As with other breweries, sales were falling generally, but sales of bottled beer were increasing:

“Sir Edward said that barrelage showed a small decline on the previous year, but sales of bottled beer still continued to rise. During the year a stronger Pale Ale in bottle - Abbot Ale - was introduced to meet the demand of those who required and appreciated a beer of that character.

The new bottling store a Bury St. Edmunds was not progressing as quickly as they could wish, but it was hoped that it would be ready before December to deal with the heavy demands for bottled beer as the existing plant was extended to the full.”
Bury Free Press - Friday 22 August 1952, page 1.

The popularity of bottled beer probably explains the introduction of Abbot, which must have been intended to compete with posh bottled Pale Ales like Bass, White Shield, Ben Truman, Double Diamond, etc. In the early 1950’s brewers got a little more room for brewing stronger beers and many came up with a higher gravity Pale Ale, either on draught or in bottle. Young’s Special and Fullers London Pride both first appeared around this time.

The combination of wartime (and post-war) restrictions on building work and the surge in demand for bottled beer left many breweries struggling to keep up. Building new, or expanding existing,  bottling stores in a running theme in the early 1950’s

Despite decent sales, profits weren’t up much because almost everything they earned was being taken in tax:

"We have been obliged to realise some of our investments to meet these commitments as the penal taxation imposed on the industry to-day has taken away the cash required for the payment of such items." he said.

GROSS PROFITS
Turning to the Profit and Loss Account, the chairman said that it would be noticed that although gross profits (£468,043 compared with £411,399) had increased satisfactorily, the net profit, after allowing for taxation (£81,543 compared with £76,777) showed only a moderate increase. This was largely due to the amount required to be provided for taxation.

Referring to the cash position — "a point which must causing concern to all Boards of Directors to-day" — Sir Edward said that apart from paying £744,822 in Beer Duty, the Company had to find an extra £50,000 during the year for the purchase of barley and for erecting and equipping the new bottling stores. In addition increased costs of maintenance to breweries and properties had to be met and transport, wages, salaries and stocks had also risen.”
Bury Free Press - Friday 22 August 1952, page 1.

Looking at the figures, you understand why the chairman would be a little pissed off: three quarters of a million paid in beer duty but profits of less than £100,000.

“£32,000 ALLOCATION
Turning to the Appropriation Account, Sir Edward said that £32,000 had been allocated to the Reconstruction and Contingency Reserve, bringing that fund to £201,725. This would leave a balance of £136,374 18s 4d. to be carried forward in the Appropriation Account as  against £135,591 13s. 9d. last year.

Of the future, Sir Edward said that unless the duty on beers, wines and spirits was substantially reduced sales were unlikely to increase by an appreciable amount, and unless taxation was reduced it was impossible to create cash reserves with which to replace plant and machinery, or to rebuild and improve their licensed premises.”
Bury Free Press - Friday 22 August 1952, page 1.

An inability to generate enough surplus cash to update the brewery and its pubs was a reason many sold up in the 1950’s and 1960’s. At a certain point maintenance and replacement of plant couldn’t be put off any further and the only options were closure or sale. Last brewery to go that way was Gales.

Let’s take a look at Abbot and some of Greene King’s other beers from this period:

Greene King beers 1954 - 1960
Year	Beer	Style	Price per pint d	package	OG	FG	ABV	App. Atten-uation	colour
1954	Stout	Stout	19	bottled	1034.3	1012.7	2.79	62.97%	450
1954	Sweet Stout	Stout	26	bottled	1046.6	1020.3	3.39	56.44%	450
1956	Harvest Brown Ale	Brown Ale	22	bottled	1035.2	1013.9	2.75	60.51%	105
1959	India Pale Ale	IPA	20	bottled	1033.3	1010	3.02	69.97%	25
1960	Lager	Lager		bottled	1034.9	1006.4	3.56	81.66%	9.5
1960	Suffolk Ale	Strong Ale	34	bottled	1056.8	1015.7	5.14	72.36%	70
1960	Abbot Ale	Pale Ale	30	bottled	1048.6	1006.7	5.24	86.21%	19
1960	India Pale Ale	IPA	20	bottled	1033	1007.7	3.16	76.67%	25
1960	Abbot Ale	Pale Ale	22	draught	1051.3	1007.9	5.43	84.60%	20
1960	Best Bitter	Pale Ale	15	draught	1038.4	1007.4	3.88	80.73%	20
1960	Ordinary Bitter	Pale Ale	13	draught	1033.9	1005.7	3.53	83.19%	26
1960	Bitter	Pale Ale	15	draught	1037.0	1006.3	4.00	83.11%
1960	Mild	Mild	12	draught	1030.7	1006.1	3.20	80.29%
1960	Burton Ale	Brown Ale	20	bottled	1033.4	1011.7	2.80	64.97%
1960	India Pale Ale	IPA	10	bottled	1033.2	1008.5	3.20	74.40%
Sources:
Whitbread Gravity book held at the London Metropolitan Archives, document number LMA/4453/D/02/002.
Which Beer Report, 1960, pages 171 - 173.

You can see that by the end of the 1950’s there was also a draught version of Abbot, plus two weaker draught Bitters. Pretty sure the one called Ordinary Bitter is IPA. They were almost certainly all parti-gyled together.