Monday, 20 August 2018

Trouble at Allsopp (part three)

It sounds like this particular annual meeting of shareholders was a lively affair. Unsurporisingly, as they were pretty pissed off. Both with the financial results and the management of the company.

The shareholders gave the directors a very hard time in the dicussion. It looks as if they had been aware before the flotation that sales were falling. Was that one of the reasons they were prepared to sell the company?

"The Hon. G. H. ALLSOPP, M.P., seconded the motion. Considerable discussion, of an acrimonious nature through out, followed.

Mr. DAVIS maintained that the deplorable condition of the concern was due to the circumstances connected with the birth, parentage, and education of the company. The prospectus distinctly promised that the proprietors would get large dividends, but there was really a sudden falling off in the sales before the company was floated. There had been a reduction in the net profits of the company in the past five years amounting to an average of £30,000 a year. Altogether he considered the failure of the company a most disgraceful one. The first and foremost of the causes for their present position was the excessive price paid for the business — (hear, hear) - and so long as this dead weight hung about the company he believed there would be no improvement in their affairs. Another great cause of their present position was that the directors had not “stuck to the ship." He further maintained that there had been gross mismanagement and excessive expenditure, and concluded by moving the following amendment: — “That this meeting of shareholders, in accepting and adopting the balance-sheet and report now presented and approving the payment of a further dividend of 3 per cent. per annum on the preference stock, hereby condemn in the most emphatic manner the business of the company during the past year, which has again resulted in a great diminution of profit without a corresponding reduction in the working expenses."

Mr. J. T. JENKINS seconded the motion."
"The Brewers' Guardian 1892", 1892, page 244.
So the price paid for the company had been too high, most of the original owners had buggered off with their profit and left it to newcomers to run the compant and the management was crap. That's quite a strong motion of censure, but probably one the board deserved.

"Mr. JEFFERIES (Ipswich) expressed disappointment at the meagre report presented to the proprietors, and complained of the amount paid to the board in the past year — £2,429.

Mr. Cunnington asked for further details about the business, and maintained that such information could have been afforded by the directors without imparting any “trade secrets.” He was glad that some of the members of the Allsopp family still remained on the board, and he considered that the fact that the Hon. George Allsopp held the same amount of ordinary stock as he had at the outset ought to inspire the proprietors with confidence that there was a future for the undertaking if it were properly worked. The subject of the reconstruction of the company was worthy of consideration."
"The Brewers' Guardian 1892", 1892, page 244.
So depite paying themselves handsomely, the directors had produced a very meagre report on the state of the company. It sounds liuke they didn't want shareholders to realise just how bad things were.

Not only were sales poor, expenses were also out of hand, with a bloated workforce.
"Mr. LEE SMITH contended that the staff at Burton was too great, and that the expenses were excessive.

The CHAIRMAN, in reply, stated that the directors would do their utmost to reduce the expenses, and there would be a considerable diminution in them owing to the closing of the old brewery. More than 100 persons were employed at Burton, and he did not think it would serve any useful end if he were to mention all their salaries. The secretary received £1,500 a year, and he considered that that gentleman earned it.

The amendment was then put to the meeting and was carried by an overwhelming majority, only three hands being held up against it.

The CHAIRMAN stated that it would be for the directors to decide what they would do in view of the expression of opinion contained in the amendment."
"The Brewers' Guardian 1892", 1892, page 244.
Thouh 100 employees isn't a huge number, when you consider Allsopp produced over half a million barrels a year. In 1884 they brewed around 850,000 barrels and were the third l;argest brewery in the UK after Guinness and Bass.*

* Document ACC/2305/8/246 part of the Courage archive held at the London Metropolitan Archive.

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